February 7th, 2010
11:00 AM ET
13 years ago

Greenspan: Tax increases alone can't address deficit

Washington (CNN) - Cutting the U.S. deficit will require addressing the rising costs of entitlement programs such as Social Security, former Federal Reserve Chairman Alan Greenspan said Sunday.

Appearing on the NBC program "Meet the Press," Greenspan said the United States "can't erase deficits by tax increases alone."

"We have to recognize the fact that one of the things we have to do, as tough as its going to be, is that benefits are going to have to be pared in conjunction with tax increases," Greenspan said.

Asked about the recession, Greenspan declared it ended.

"The recession is over," he said, adding it "bottomed out" in mid-2009.

Now, Greenspan said, it was unclear if U.S. innovation would bring necessary job creation to reinvigorate the economy.

"We don't know where the jobs are coming from," Greenspan said. "We don't know how this market … is going to move forward."

Filed under: Alan Greenspan • Economy
soundoff (37 Responses)
  1. Big Joe

    I beileve in a VAT for everyone. In that, the the lower 1/2 of workers in this country will FINALLY pay their fair share in taxes. The fact that the lower half bottom feeders pay nothing – and often get something back on top of that – has done nothing but aggrevated the deficit problems we have in this country. Everyone...rich and poor should pay something for the basic operation of government.

    Many of these people made stupid decision in life that have resulted in their position. And the government rewards them. That crap needs to stop.

    February 7, 2010 01:50 pm at 1:50 pm |
  2. Ken, AZ

    Joe – Business don't outsource jobs because of the tax rates in this country; they outsource because of the near $1.00 per hour pay rate and lack of workplace safety standards. Can you say sweat shops? If things are so bad here for the wealthy, then why haven't they left already? Answer: Most things favor them, especially when republicans are in power.

    February 7, 2010 01:56 pm at 1:56 pm |
  3. one voice

    The hole that Bush dug was deep and crippling to our Country and it's people. It will take years to rebound from the failed policies of the Bush Administration. Our Great Country can't afford another self-serving Republican in the White House for years to come.

    February 7, 2010 02:04 pm at 2:04 pm |
  4. Gil Oberdas

    Entitlements are running up the biggest debt now, but the republicans have forgotten the 1.4 Trillion that has been wasted on the bush started unjust wars that have complished nothing, but wasted close to 6,000 American lives so far. Our military spending is alos out of control. Of course, so is our military. .

    February 7, 2010 02:12 pm at 2:12 pm |
  5. Annie, Atlanta

    I have a plan that could help, and I offer it up here for free. Stop the wars! Trim down the military industrial complex before it devours us. Put that money into infrastructure. Turn back the tax cuts for the rich and tax inheritance. Institute a public option so competition exists and insurance companies can no longer charge whatever they want and call all the shots, causing a trickle effect down the line so hospitals and doctors can actually afford to exist. Institute restrictions on Wall Street once again so they can't keep all the profits while we cover their losses. And renegotiate those free trade agreements that benefit everyone but us. There you go. It's not rocket science. Any questions?

    February 7, 2010 02:13 pm at 2:13 pm |
  6. Len (Colorado)

    Many things need to be changed.

    But this is fact and we Americans must wake up. Taxes support your local states, communities etc. We have lost almost $3 trillion dollars in the Bush Tax cuts to the wealthy.
    You will see, if you haven't already, services being cut in your communities....Example, Phoenix, Az may cut over 300 police officers. And at the same time, the state of Arizona has a bill indicating people can carry concealed weapons without a license!

    We need to get our priorties straight and stop this politics of NO.

    February 7, 2010 02:31 pm at 2:31 pm |
  7. Mind over Matter

    What a proud moment in time, I look back at the time when Alan Greenspan was chairman of the Federal Reserve with fond memories. It was one of the few in the history of this country where we actually saw deficits turn into surpluses. Only to be unwould after his departing, I might add. Deficits to surpluses back to deficits again. Oh, it was a wonderful time in this great nation's history, back when Alan Greenspan was in charge of the Federal Reserve. The nation was actually financial stable, economy going up the entire time, paid down some of the enormous debt, everybody was happy. Times were good, back when Alan Greenspan was running the federal reserve. How I miss those days! :- )

    February 7, 2010 02:34 pm at 2:34 pm |
  8. Mike in MN

    I agree with Greenspan. I believe the only way to fix Social Security and Medicare is to raise FICA and Medicare tax and to reduce future benefits. These two programs have been grossley mismanaged for decades by both parties. Unfortunalty the only way to fix them will be very unpopular with voters so neither party will probably have the political will to fix them on their own. The problem will probably remain until both Democrats and Republicans agree to both raise the taxes and reduce the benefits.
    Both of these problems have grown into monsters due to government mismanagement. Both of these stand as examples why we should never create another big government entitlement program like the Democrats want to do with health care reform. These two threaten our future, a third is certain to seal our doom.

    February 7, 2010 02:41 pm at 2:41 pm |
  9. Jeff Spangler, Arlington, VA

    This guy has lost all credibility in matters economic after having been dumb or naive enough to believe that Wall Street would police itself, thus contributing to the intellectual laxity which caused the current depression.

    February 7, 2010 02:48 pm at 2:48 pm |
  10. Mike in MN

    The last time we had a balanced budget was when voters restored Republicans to control of the House and Senate and the Democrat president moved to the right. In short it happend when the politics in Washington moved to the right and true conservative fiscial policies were put in place.
    Bush and the Republican congress under Bush lost their way and did not honor true conservative fiscial polices.
    Republicans have admited they lost their way under Bush and the Tea Party moverment will give support to Republican candidates that support true conservative fiscial policies.
    Polls show independents are ready to give Republicans another shot.
    The elections in Mass., Virginia and New Jersey prove it.
    All indications show that voters may restore the House and maybe even the Senate to Republicans in the November elections. If that happens Obama will have two choices. Move to the right like Clinton did or try and continue to insist that Republicans support his out of control spending and liberal/progressive big government agenda.

    February 7, 2010 02:55 pm at 2:55 pm |
  11. D. Bunker

    Funny how Greenspan ignores US military spending, which is WAY higher than any other country in the world. Nor does he mention all the corporate "entitlements" (welfare) the US has doled out. Get real Alan; start focusing on the "elephant in the living room" that none of you wealthy elitists want to discuss.

    February 7, 2010 03:03 pm at 3:03 pm |
  12. insightful

    Greenspan was true to form He didn't mention cutting our lucrative foreign aid package (surgically, that is) or reining in the exhorbitant defense contracts that have raided our economy for so long.

    During my Air Force career, which ended in 1978, I, too, have sipped coffee from one of those $6,000.00 coffee pots that were installed on Air Force cargo and personnel carriers. And believe me, it didn't add to flavor of the "class" of such a ripoff.

    Also, I have used one of those $300.00 hammers. I also talked with aircraft crewchiefs who went to the local hardware store and purchased (out of their own pocket) a specific bolt and nut that they needed to repair a component of their aircaft. The alternative was a hermatically sealed samo-samo to be gotten through the Air Force supply lines. Local hardware purchase: 39 cents. Air Force cost for the hermatically sealed one: about $70.00.

    Defense contractsmust somehow be in the mix of tightening up contractural costs to a more frugal, realistic figure. If the profiteering (and mediocre quality) of contracted products could be laid out in the sunshine light of a clear blue day, it would make Wall Street greedies look like street corner venders.

    February 7, 2010 03:13 pm at 3:13 pm |
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