Greenspan's Incompetence Badgers Wisconsin's Workers

Alan Greenspan has been strangely missing from the fierce battle over the future of public sector unions in Wisconsin and other states. His absence is strange because he bears more responsibility for the current conflict than anyone else alive.

The reason is simple. Mr. Greenspan's incredible incompetence in allowing the $8 trillion housing bubble to grow unchecked created the fiscal crisis that is gripping Wisconsin and most other states.

To be clear, states always face financial stress in economic downturns. Most states had to struggle to balance their budgets in 2001-2002 and earlier in the earlier 1990-1991 recession. During a recession tax revenues fall. Consumers buy less, which means less sales tax revenue. Workers earn less money, which means less income tax. And property values fall, leading to less property tax revenue.

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