Former Treasury Secretary Donald T. Regan said Monday that the factors that caused last Oct. 19’s stock market collapse are still present and have not been dealt with effectively by policy-makers.
While not predicting another collapse, Regan told reporters that regulatory and self-regulatory agencies have not solved the problems that led up to Oct. 19.
“The ingredients are still there,” he said after speaking to a financial conference. “The system has not been fixed.”
Regan, who was Treasury secretary from 1981 to 1985, warned that if another collapse occurs, Congress will legislate rules that could hamstring the market. But he did not outline any proposals that policy-makers could take to prevent another drastic price fall.
He said he opposed federal tax increases to cut the budget deficit, arguing instead that spending should be reduced.
Regan also cautioned against lawmakers’ lowering capital gains taxes--a move Vice President George Bush has endorsed in his presidential campaign.
Regan said businesses and individuals should be given time to adjust to the changes mandated by the 1986 Tax Code before more alterations are made.
He also said a change in the capital gains tax could invite changes in other areas in the tax law. “It would be a feasting day for lobbyists,” he said.