Greenspan: 'We were all wrong' about surpluses in 2001 (Marketwatch)

[cthrumatrix]

Greenspan: 'We were all wrong' about surpluses in 2001

By William L. Watts

WASHINGTON (MarketWatch) -- Federal Reserve Board Chairman Alan Greenspan on Tuesday defended his 2001 call for a tax cut, arguing that "we were all wrong" at the time about the durability of projected budget surpluses. Responding to a question by Sen. Hillary Clinton, D-N.Y., before the Senate Special Committee on Aging, Greenspan said he had suggested at the time that the tax relief should be tied to a trigger that would rescind the cut if budget projections didn't pan out. Greenspan said the erosion of congressional budget controls that require tax cuts and spending increases to be rendered budget neutral exacerbated the slide into deficits. Greenspan reiterated his support for reinstating such "pay-go" rules.

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?guid={44B7257D-DCA5-4666-A563-8691A3512E4A}&siteid=mktw

Hmmmm....AL..if I recall in the book "the Price of Loyalty" you and Paul O'Neil talked about the $2 trillion surplus perhaps to be used for Soc Sec....BUT...Shrubby wanted tax cuts.

Time for Al to be hooked up to "lie detector" machine with a jail cell nearby.

[BadGimp]

1. The sheeple will not care

The Michael Jackson trial is in full swing and we got us a slew of mass killoings to fixate on.

Pass the Pringles and give me the remote.

[w4rma]

31. No. The people DO care. But big media doesn't.

Don't get mixed up what big media makes hay out of and what regular people do.

[KayLaw]

2. Did you hear Sen. Clinton?

She said to Greenspan: "Just for the record, we weren't all wrong."

[Toucano]

26. BRA-FUCKING-VO!

Tell 'em, Hill!

[gratuitous]

3. All of us, Al?

Gee, I appreciate the opportunity to bask in the reflected glory of the Maestro's wisdom, but there were quite a number of folks who said that the proposed tax cuts in 2001 were a budget buster, and that the surplus could have been dedicated to any number of projects, short- and long-term.

Instead, the Bush plan to empty the Federal Treasury into the overstuffed pockets of his political benefactors went on unchecked, with the imprimatur of the Fed chairman to squelch any reasoned dissent.

Sorry, Alan. The deficit is your political overlord's sole creation and baby. You were the midwife. If there's blame to be apportioned, it begins with Stupidhead -- not "all" of us, you mealy-mouhed hypocritical lying sycophantic jackass.

[saskatoon]

65. Gratuitious

WOW you told it like it is---and I liked the way you framed it, you sure didn't pull any punches.

[raccoon]

67. I couldn'ta said it better myself

"If there's blame ... it begins with Stupidhead -- not "all" of us, you mealy-mouhed hypocritical lying sycophantic jackass."

Yeah, trying to avoid blame..."all of us"--Yeah, right.

He & Ebbers & Lay, making the big bucks and then acting like they don't know what's going on! They're disgusting.

[wildmanj]

4. wrong

speak for yourself greenSPIN

[GOPBasher]

5. No, we were not "all wrong," asshole.

Many of us -- including me, hardly an economics expert -- thought that the tax cuts would destroy the projected surplus. Many of us were right, Greenspan, you asshole.

[Igel]

43. But most estimates are that half the difference between

the projected budget surplus and the deficit in the first year was caused by *recession*, not tax-cuts.

In other words: no tax cuts, at best a very, very small surplus, and most likely none. The projection for Clinton's last budget were too optimistic.

The projections for 10 years crucially assumed that what was already a record-long recovery would continue with no change; looking at leading indicators was forbidden. Many doing the forecasting knew it was a crock at the time. The projections were not "reality based."

Greenspan drank the kool-aid: he believed the projections, in what may have been an act of overbearing hubris--he was widely given credit for managing the economy, and could easily have assumed that his mastery would continue.

[GOPBasher]

48. Yeah, that's true, but still, the last thing

we needed at that time was a huge tax cut for billionaires. Regardless of how things would've been without the tax cut, they certainly would've been much better than they are now. Bush has added $2 trillion to the debt in four years. A lot of that occurred because of his constant tax cuts for the richest people.

[Seabiscuit]

45. Yeah; DU to Greenspin: "what you mean 'we', Kimosabe?"

[GOPBasher]

49. exactly. n/t

[displacedtexan]

6. Gotta hide the money loss! Gotta hide the money loss!

If Greenspaniel now claims that there never was a surplus, then we're supposed to stop trying to figure out what BushCo did with the money.

He might as well have said: DON'T FOLLOW THE MONEY.

[loritooker]

9. Very astute observation. (And I like the "Greenspaniel")!

[dchill]

69. Gotta hide the money loss? ... no - theft

Absolutely.

Talk about voodoo economics! These jerks were able to steal billions that weren't even there. It's like magic! This is the quickest, most profitable way to "reduce the size of government."

[chelsea0011]

7. O'Neil was very clear that Greenspan was against any tax cuts

without safety nets.

[Robbien]

13. Ha! Watch how fast he will support the expansion of those tax cuts

in this year's budget package. BushCo will say jump and Greenspan will be airborne lickety split.

[Festivito]

8. Is Greenspan paid-off with sex or something?

He has been making no sense lately. As though he is purchased to talk according to someone elses agenda.

"We were all wrong," my butt. He was wrong. The rest of us were agog and astonished at the idiocy.

[ProfessorGAC]

10. We Weren't ALL Wrong, Al!

Go back in the archives right here at DU and see what this economic analyst said at the time.

It was bad idea then, and many of us knew it. Models i published in 1993 established that overcontrol of fiscal policy through small shifts in marginal tax rates, as long as they aren't confiscatory at the start, will do nothing to stimulate the economy and are likely to create variability in a near chaotic state. Small perturbations in inputs to a system this dynamically interactive are almost always (statistical theory) likely to cause more negative consequences than positive.

It wasn't needed for the economy. It wasn't likely to help. It was likely to hurt growth and employment levels. I was right. About a third of the economic community was. Al, on the other hand was part of the other two-thirds. Dumbass.
The Professor

[rock]

11. You're right Greenspan

You were ALL WRONG.

[aden_nak]

12. Speak for yourself, Alan.

[cliss]

14. That's it (throws down the gauntlet)

I've had it with Alan Tailspin. He's finally proving to us all that he has a bad case of Alzheimer's.

[Ganja Ninja]

15. "We were all wrong back then but take our advice on SS today."

Dishonest fuck.

[Frances]

19. Good point

Greenspan says we were all wrong before, which implies that he was just going along with the Bush crowd. Now he wants us to do the same thing? I don't think so.

Greenspan had a lot more credibility before he became Bush's mouthpiece.

[ProfessorGAC]

24. Great Catch!

The Professor

[Ganja Ninja]

29. It's exactly what he's saying.

They were all wrong and couldn't predict the deficits 4 years ago but they know for sure Social Security is going to be bankrupt in 2042. They can't project with any accuracy four years into the future but they can tell you what's going to happen 37 years from now.

[ProfessorGAC]

30. Completely Agree

Just complimenting on putting those connections to print. Of course, i don't believe anything any of them say, and i don't think any of them know the time of day, so not believing they know what they're talking about on SS is so "par for the course" that missed the obvious that you pointed out.
The Professor

[Igel]

44. The budget surplus projections from the

'90s had the same amount of reliability as the ones today do.

They're forced to make unrealistic assumptions. I haven't believed them since Bush I was in office.

[Rainscents]

16. I'm guessing Greenspan is suffering from Memory lost Deaseas...

[paineinthearse]

17. Revisionist history. nt

[Yavin4]

18. Telling Congress That It's Okay To Cut Taxes Without Cutting Spending

is like telling an obese man that it's okay to have McDonald's super sized meals once in a while.

Come on Alan. It took a decade's worth of hard work and the loss of several congressional seats to get the Congress to finally come around on a balanced budget which happened during the Clinton admin. All it took to undo all of that work was your pathetic testimony in support of Bush's tax cuts.

I knew, and everyone on the planet knew, that those tax cuts would plunge us back into deficit spending, which would've happened with or without 9/11.

I take pleasure in seeing that the world is finally seeing Greenspan for the Bush-sycophant that he is. He has run out of cover, and his disastrious fiscal policies for the past six years have come home to roost.

[ferg]

20. everyone with 3rd grade arithmetic knew you were wrong at the time

you dishonest hack

[Jeff in Cincinnati]

21. What do you by mean "we," you pie-eyed sack of shit!?

Nearly every Democrat in Congress said this tax cut was going to be a disaster. Al Gore certainly warned the American people that Bush's economic plan was going to be a disaster (remember the phrase "risky scheme" from the 2000 campaign?). Every independent economist and even some conservative ones warned that budgets were going to spiral out of control.

You just decided not to pay any attention to the warnings, you hack!

I want Alan Greenspan imprisoned for perjury. He's lied to Congress over and over during the past decade. I want him to spend his twilight years in a federal penitentiary.

[skids]

22. Spin it.

I know Greenspan's an ass, but his time with us is very limited.

"Greenspan said he had suggested at the time that the tax relief should be tied to a trigger that would rescind the cut if budget projections didn't pan out."

... so whose "fault was it" for only listening to the parts of what Greenspan said which they liked, and ignoring the safety valve... Hmmm?

[MGKrebs]

23. How can he be "wrong" and have wanted a trigger too?

I mean, if he wanted the trigger, he should be blaming it on those who ignored the trigger.

Possible alternatives:
He did not really want the trigger.
The trigger would not have worked.
He's a dumbass who makes no sense.


edited for clarity (I hope)

[sadiesworld]

25. Translation: We can't pay the IOUs owed SS.

(but I'm sure the picture will be rosier when it comes to extending the monkey's tax cuts...oh yeah, no need to pay SS--more tax cuts for the wealthy!)

[librechik]

33. we can. we'd just rather give it to our GOP contributors and war moguls

fuck the rest of us.

[sadiesworld]

35. I was using Greenspan's "voice".

You know that's where he is going with this. :hi:

[UpInArms]

27. Meanspin has been wrong about everything he has touched

since inception.

He is a used up douchebag that has sucked the dollars from every citizen of this country into his and his cronies' pockets since he arose from whatever swamp he crawled out of.

[William Bloode]

28. "We" hell

If i remember correctly in polls taken at the time the majority of the American public at the time thought that there should be no tax cut and the surplus should be used to shore up social security and pay down the debt.

What an ass hat!

[hansolsen]

32. Greenspan's tenure has seen the demise of the American middle class

and the rise of the greatest disparity in income in world history. The man and his policies have been a disaster, and the only real shame is that he served under Democrats as well as Republicans.

It's a little late now for Hillary to be making anti Greenspan noises. Where were Hillary and Bill when it came time to pass NAFTA and cut the capital gains taxes? They were to be seen leading the charge, that's where.

[Frances]

50. Hillary was right!

The Dems were the ones who shifted us from deficits to surpluses when they courageously voted for Clinton's tax plan in 92.

We got surpluses, but some of those brave Dems lost their seats in Congress in the 94 election--because of their votes for Clinton's tax plan.

[hansolsen]

53. I wish I believed you, but I fear Hillary is a corporate Democrat first

and a populist Democrat second. She could prove me wrong, but I doubt it.

[Frances]

55. All I can say is that I was proud

to be an American when Bill Clinton was president. And Hillary is a much better senator than any Republican I can think of. Elizabeth Dole and Kay Bailey Hutchinson are what I would call corporate senators.

[hansolsen]

58. Well, I agree with that, but that doesn't mean she is the best candidate

we could field. I simply ask that you judge Hillary against what is best for the nation, not what she may be running against on the Repub side.

[Frances]

63. Hillary is not my first or second or third choice

to be the Dem nominee for President.

But I think she is a fine senator, even if I don't agree with all of her votes.

I am keeping my eye on Schweitzer, the governor of Montana, for President.

[Democrats_win]

34. Narcissistic Greenspun looking in mirror rather than reality, he missed

everything. He raised interest rates to slow the economy at the time rising energy prices were putting brakes on economy.

[lthuedk]

36. He's a Trillion Dollar Manho

Stephen Pitt

[Joe Turner]

39. LOL, that cartoon perfectly captures the story. n/t

[bluedog]

37. according to this.there is NO money Left

snip..................

In sharp contrast to that promise, Smith said Bush openly acknowledged spending all Social Security surplus in a speech delivered in Pennsylvania on February 10, 2005. According to Smith, Bush stated,

"Every dime that goes in from payroll taxes is spent. It's spent on retirees, and if there's excess, it's spent on government programs. The only thing that Social Security has is a pile of IOUs from one part of government to the next."

"How can this be?" Smith asks. "Why aren't the American people outraged?"

snip
.

"The President did not renegotiate his covenant on Social Security with the American people," Smith said. "He didn't even tell them that he had unilaterally broken the covenant -- at least not until he desperately needed some new ammunition for his crusade to privatize Social Security. The American people must demand that Bush stop misusing Social Security money and that the $1.7 trillion already spent be repaid."

http://news.corporate.findlaw.com/prnewswire/20050310/10mar2005100935.html

[tom_paine]

38. "We were all wrong" MY ASS

You knew EXACTLY what you were doing, Reichsminister of Finance.

Exactly.

Either you are a gullible fool who believed Bushevik Lies or you are in it with them.

Don't try and pretend for a SECOND it was an "inncoent mistake".

Incompetence or Corruption, there are no mitigating circumstances or bullshit excuse that are worth a damn, Reichsminister of Finance.

[cthrumatrix]

41. corporate media cartel will let him LIE.... what else is new

[Colorado Blue]

NOW he figures it out. AAAARRRGHHHHHHHH.

Time for the rich to pay their damn taxes.

[amazona]

40. I wasn't wrong, Alan

Seems like if a nobody in nowhere, Louisiana knew what was going to happen, you should have been able to figure it out.

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72

[Zorra]

42. Dear Al: Home Ec. Rule #1 - If you take all the money out of the cookie

jar, there won't be any more money left in the cookie jar.

Rule# 2 - Never leave a republican alone with your cookie jar.

"Greenspan said he had suggested at the time that the tax relief should be tied to a trigger that would rescind the cut if budget projections didn't pan out."
:eyes:
Al, Al, Al,....please....we already figured out that you and your republican buddies deliberately sold the future of America to the highest bidder. I'm afraid we're going to have to let you go, as Head of the Federal Reserve, "all wrong" means you did not do your job. Big, big boo-boo, dude.

You're fired.

[Toucano]

52. I love Rule #2!

But not doing your job in a Bush administration gets you promoted, not fired, silly!

[The_Casual_Observer]

46. Unfortunately , they are in a box. Raise taxes, political

suicide, chance of "slowing down" the economy. Leave it this way, economy slows down because of inflation, dollar gets even weaker.

bush has created a real nightmare, just as anybody who looked at his methods objectively predicted.

[CJCRANE]

47. Just like when David Kay

said "we were all wrong" on WMDs in Iraq.

[Dcitizen]

51. Surplus, tax cut. Deficits, more cut!!! n/t

[triguy46]

54. The gild is off the lily

Time for Al to go. He is not of any worth today.

[Turley]

56. A Jail Cell?

I'm no lawyer, but I don't think Greenspan has committed any actual crimes. Maybe you can fill me in?

[slothrop]

57. why waste energy posting, comment to the FED

Vent your energy at the source, not here where you preach to the choir. Use this link and choose the option "Comment on Board Members"
http://www.federalreserve.gov/feedback.cfm

[annabanana]

66. Thanks slothrop!

I just did. I wish this link had been further up in the thread. The Fed would have gotten an earful!

Oh, and Welcome to DU!
:toast:

[Media_Lies_Daily]

59. Lyin' bastige.

[SoCalDem]

60. "WE"..."WE"...":WE"...

Does he have a frog in his pocket?? HE is the ultimate authority on our economy, and a simple statement like that somehow excuses their malfeasance??

Ordinary people are losing THEIR ability to deal with an "oops", yet the main man on our country's economy can just "oops" it and go on:grr:..

Let's just get OUR money back , Alan...how 'bout THAT!! Rescind the tax cuts, and let the ones who got it ...GIVE IT BACK.. That might help a bit,eh??

I'll give back our $600 iof the wealthy out there give back THEIRS :)

[daleo]

61. Canada is still running a healthy surplus

The U.S. could be too. The difference is, we didn't give a huge tax cut to the rich.

[Barrett808]

62. Reminds me of Duelfer: "We were almost all wrong" on WMD

Well, no. Millions of us called bullsh*t on the lies.

And so again with Greenspan.

[madmark]

64. No, we were not all wrong.

Some of us (including me) thought it was fucked at the time Bush proposed the end of fiscal discipline and you endorsed it. And I am at best a casual student of the economy and even I could figure this out. This is your job and you should have known better and instead you whored your opinion for Bush. You effectively shit on your legacy as an economic policy maker with that endorsement and your after the fact excuses/explanations are nauseating. If you now think you were wrong say,"I was wrong." None of this "we" shit.

[raccoon]

68. all these a-holes at the highest levels

dodge responsibility for their actions six ways from Sunday,
then they have the fvcking NERVE to say,

Ordinary working stiffs shouldn't be able to file Chapter 7 bankruptcy and escape their debts, what about PERSONAL RESPONSIBILITY??!!

THEY wouldn't know anything about personal responsibility, would they?