Greenspan Throws Cold Water on Economic Case for GOP's Tax Plan

(Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan doesn’t sound like a big fan of the Republicans’ proposed tax plan.

“What we ought to be concerned about is the fact that the federal debt is rising at a very rapid pace and there’s nothing in this bill to essentially stop that from happening,” Greenspan, 91, said in an interview Thursday on Fox Business Network. “Economically it’s a mistake to deal with sharp reductions in taxes now.”

Greenspan -- who was a Republican economic adviser before becoming Fed chairman in 1987 -- said he supports the idea of reducing the corporate tax rate to 20 percent, as the proposed House bill would do.

But “don’t look to that as a major factor in expanding the economy,” said Greenspan, a sought-after expert on tax and economic policy for more than four decades. “It just brings us back to neutral as far as our relative competitiveness around the world is concerned.”

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