Friday, March 04, 2005

Consumption Tax?, Spending Cuts, and much more

Federal Reserve Chairman Greenspan's suggestion that the USA implement a consumption tax is just another in a long series of policy assaults against average Americans. To read text:

A consumption tax would be a national sales tax on all goods and services purchased by Americans. It would hit hard poor and middle income Americans who pay little or no income tax because they do not earn enough or have big families. Under a consumption tax all Americans would be paying no matter how much they make or don't, whether they are retired, or disabled. Even if we implemented rebates for the poor, as Greenspan recommends, they would still be losers.

The consumption tax proposal comes on the heels of other recent comments by Greenspan all designed to wage class warfare. Two weeks ago Greenspan was blessing President Bush's social security reform plan and private accounts--Neocon's have publicly stated that Bush's reform plan is the start of the dismantling of social security. A few days earlier Greenspan was recommending spending cuts to reduce the deficit--a deficit that he helped create when he flip-flopped in 2001 on fiscal austerity and endorsed the Bush tax cut.

Americans should not ignore the Fed Head's comments because they hold powerful political sway in Washington. We also need to realize that the Federal Reserve has gained God like status as we have reduced fiscal policy in favor of monetary policy, which the Fed controls. The more that we have downsized and privatized the more power we have transferred to the Federal Reserve.

To this Fed Watcher, Greenspan's recent comments are atypical. Greenspan is known for mincing his words, he has not done so recently. He only speaks out when wants something or when his free market ideology is threatened. For example, when the Enron scandal broke and free marketers were running for cover Greenspan spoke out and said that we must not interfere or pass laws, instead we should let the market run its course.

Given Greenspan's comments either a larger battle is brewing--something beyond social security--or Greenspan senses the tide is beginning to turn against the Presidents plans and free market ideology. What is clear is that Greenspan is doing as the creators of the Federal reserve envisaged and the second national bank of America before that--to wage class warfare and make the rich richer.

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