Wednesday, March 02, 2005

More Class Warfare from the Fed Head

Fed Head Alan Greenspan waged further class warfare during his recent Humphrey Hawkins Testimony before congress (February 16/17, 2005).

By approving President Bush Social Plan of "private accounts', albeit with a "go slowly" approach Greenspan was blessing Bush's attempt to radically alter Social Security--a program that has benefited a multitude of Americans in need.

Greenspan again opted for spending cuts over tax increases as a means of reducing the budget deficit. Some in the media noted that Greenspan was less staunch in his advocacy for not raising taxes when talking about the budget deficit. "You're going to have to increase taxes or reduce spending somewhere, if you're going to keep the deficit under control", Greenspan said. Other comments clearly showed that he favors spending cuts over tax increases.

The democrats were unable to get Greenspan to denounce the Bush tax cuts permanent. The Fed Head pointed out the benefits of the tax cuts; "The evidence does indicate that the economy was significantly supported by the tax cuts in their initial form,'' he said. In typically Greenspeak he refused to openly endorse making the tax cuts permanent; ``But that, of course, has nothing to do with tax cuts going forward in any material way.''

The Bush tax cuts are a major component of what created the budget deficit.. The deficit then became the birth mother for Bush's draconian budget proposal that would devastate much of the aid to the poor and middle class Americans. It was Greenspan's endorsement of the proposed tax cuts in 2001 that helped push them through Congress.

All in all the Greenspan's Humphrey Hawkins testimony was a victory for President Bush to wage war on Social Security. It also was another glimpse of how the Federal Reserve, and Alan Greenspan in particular, continues to wage class warfare.

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