"Look, I'm very much in favor of tax cuts, but not with borrowed money. And the problem that we've gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money, and at the end of the day that proves disastrous. And my view is I don't think we can play subtle policy here"

In this quote, Alan Greenspan, previous Chairman of the Federal Reserve, articulates his position on tax cuts and federal government spending, particularly highlighting his issue over making use of obtained cash to finance these measures. Greenspan starts by revealing his assistance for tax cuts, which suggests that he believes in their possible to promote financial growth by increasing non reusable income for individuals and businesses. Nevertheless, his assistance is qualified by a vital caveat: he opposes carrying out tax cuts through the accumulation of financial obligation.

Greenspan highlights a crucial financial principle: loaning can result in longer-term monetary instability. When tax cuts are financed by federal government borrowing rather than by cutting expenditures or increasing profits from other areas, it can result in a boost in the national financial obligation. This scenario can end up being unsustainable, especially if the obtained funds do not lead to adequate financial growth that could eventually balance out the financial obligation.

He mentions the more comprehensive issue of both spending programs and tax cuts being supported by borrowed cash in the last few years. Here, Greenspan is mentioning a systemic problem in fiscal policy, where governments often resort to obtaining instead of making tough decisions about prioritizing expense or discovering alternative income sources. Over-reliance on financial obligation can crowd out private investment, cause greater rates of interest, and position a problem on future generations.

His usage of the term "dreadful" highlights the potential long-lasting effects of such fiscal practices, hinting at situations like increased inflation, lowered credit scores, or recessions. Greenspan's call to avoid "subtle policy" suggests a requirement for simple, perhaps more transparent financial policy that focuses on sustainable economic practices. He promotes for clear and decisive policy steps that align tax cuts with accountable financial management, ensuring that the economy can preserve stable growth without sustaining excessive financial obligation.

Overall, this quote shows Greenspan's issue for financial discipline and sustainable economic policies that do not threaten long-lasting financial health in favor of short-term advantages.