Former Fed boss Alan Greenspan told a Senate panel “tax reform” will be required to fix the economic problems besieging the economy. “There is no credible scenario of addressing our current fiscal problems without inflicting economic pain,” he said in a prepared statement. “We have been procrastinating far too long in coming to grips with the retirement of the baby-boomer generation, a fiscal problem that has been visible for decades.”
He called for “reforms” to the Medicare health program for the elderly and the Social Security and endorsed tax and entitlement reform recommendations made last year by the White House’s so-called Bowles-Simpson commission that met in secret.
Democrats called it the “cat food” commission because proposals would have eliminated key portions of the so-called social safety net and forced the elderly into such dire poverty that they would only be able to afford to eat cat food.
Co-chair Erskine Bowles was criticized for sitting on the panel because he also serves on the board of Morgan Stanley. The IMF proposed taxing the financial industry but no such recommendation was included in the Bowles-Simpson report.
Honeywell CEO David Cote was appointed by Obama to make sure Pentagon expenditures remained in place.
“What impressed me most of Bowles-Simpson is that it addresses tax expenditures,” Greenspan told the panel.
The plan calls for massive tax increases – specifically $100 billion in increased tax revenues through various “tax reform” proposals, including a 15 cent per gallon gasoline tax and eliminating a number of tax deductions such as the home mortgage interest deduction and the deduction for employer-provided healthcare benefits.
The recommendations that were ultimately shelved also contained proposals for a VAT or so-called value-added tax.
Although 154 Republicans signed a letter opposing the VAT proposal, a few “conservatives” pushed for increased taxes, including establishment script-readers Glenn Beck and Bill O’Reilly:
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