WASHINGTON (AP) - Former Federal Reserve Chairman Alan Greenspan, in his upcoming book, bashes President Bush for not responsibly handling the nation's spending and racking up big budget deficits.
A self-described 'libertarian Republican,' Greenspan takes his own party to task for forsaking conservative principles that favor small government.
'My biggest frustration remained the president's unwillingness to wield his veto against out-of-control spending,' Greenspan wrote.
Bush took office in 2001, the last time the government produced a budget surplus. Every year after that, the government under Bush has been in the red. In 2004, the deficit swelled to a record $413 billion.
'The Republicans in Congress lost their way,' Greenspan wrote. 'They swapped principle for power. They ended up with neither. They deserved to lose.'
In 2006, voters decided to put Democrats in charge of Congress for the first time in a dozen years.
Greenspan's memoir, 'The Age of Turbulence: Adventures in a New World, is scheduled for release Monday. The Associated Press purchased a copy Saturday at a retailer in the Washington area.
The book is a recollection of his life and his time as Fed chief.
Greenspan, 81, ran the Fed for 18 1/2 years and was the second-longest serving chief. He served under four presidents, starting with his initial nomination by Ronald Reagan.
He says he began to write the book on Feb. 1, 2006, the day his successor -- Ben Bernanke -- took over.
The ex-Fed chief writes that he laments the loss of fiscal discipline.
'Congress and the president viewed budgetary restraint as inhibiting the legislation they wanted,' he wrote. 'Deficits don't matter,' to my chagrin, became part of Republicans' rhetoric.'
Greenspan long has argued that persistent budget deficits pose a danger to the economy over the long run.
At the Fed, he repeatedly urged Congress to put back in place a budget mechanism that requires any new spending increases or tax cuts to be offset by spending reductions or tax increases.
The large projected surpluses that were the basis for Bush's $1.35 trillion, 10-year tax cut approved in the summer of 2001 'were gone six to nine months' after Bush took office that year, Greenspan wrote.
There were projections the government would run a whopping $5.6 trillion worth of surpluses over the subsequent decade after the cuts. Those surpluses, the basis for Bush's campaign promises of a tax cut, never materialized.
'In the revised world of growing deficits, the goals were no longer entirely appropriate,' Greenspan noted. Bush, he said, 'continued to pursue his presidential campaigns nonetheless. Most troubling to me was the readiness of both Congress and the administration to abandon fiscal discipline.'
Greenspan, in testimony before Congress in 2001 gave a major boost to Bush's tax-cut plan at the time, irking Democrats. 'The tax cut testimony proved to be politically explosive,' Greenspan wrote.
At that time, Greenspan made the argument before Congress that a tax cut could help the economy deal with sagging growth. The economy slipped into a recession in March 2001. The downturn ended in November of that year.
Surpluses quickly turned to deficits after the bursting of the stock market bubble and the 2001 recession cut into government revenues.
'How could the forecasts have been so colossally wrong?' Greenspan wondered.
Government spending increased to pay for the fight against terrorism and receipts declined because of a string of tax cuts.
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