Read Daniel Gross in Slate: “Alan Greenspan, Bush Administration Hack.”

Gross’s point has been obvious at least since Greenspan’s absurd defense of the Bush tax cut on the grounds that it would be dangerous for the federal government to pay off its debt. What was the horrible danger, from which we have now blessedly been spared? Once the debt was paid off, funds would accumulate in the Treasury, and the result would be the fedeal government buying corporate equities and thus gaining improper influence over corporate management.

Assume such a surplus were to accumulate (which seems like a pretty remote prospect right now). Quick, list four things the government could do with the money. We’re dealing with a few hundred billion dollars; if surpluses were to turn chronic we could always cut taxes then, or share revenues with the states.

1. Buy state and local debt. (There’s currently about $1.3 trillion outstanding.)

2. Buy an index fund of corporate debt. ($4.8 trillion.)

3. Buy foreign sovereign debt.

4. Buy an index fund of corporate equity ($12 trillion) and don’t vote the shares.

Greenspan’s argument is of the sort that could only be made, and believed, for strong ulterior motives. He’s entitled to his Objectivist anti-government prejudices. But he shouldn’t be allowed to parade them as the exercise of neutral expertise.

Which reminds me: Churchill is supposed to have said that anyone who wasn’t a socialist at age twenty had no heart, while anyone who was still a socialist at thirty had no head. I wonder what he would have said about anyone, at any age, who ever mistook Ayn Rand for a serious thinker?


The alleged Churchill quote turns out to be an orphan, which has been attributed to everyone from GBS to Ambrosse Beirce. According to one source, Guizot originally said it about being a republican (in French politics).

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact:

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