US Federal Reserve chairman Mr Alan Greenspan repeated today that he prefers tax cuts rather than new government spending to kick start the faltering US economy.
"In general ... it is far better, in my judgement, that the surpluses be lowered by tax reductions than by spending increases," Mr Greenspan told the US Congress Budget Committee.
The Fed chairman said any tax cut should be "phased in" to protect against the return of budget deficits.
Mr Greenspan said he favors tax cuts because he does not believe the government should accumulate cash and purchase private assets once it has paid off the $3.4 trillion national debt - or whatever amount can be paid off in the next ten years.
"Private asset accumulation by the government could cause distortions in capital markets." he said.
AFP