Washington, May 08: Federal Reserve Chairman Alan Greenspan said Thursday that the US government's budget deficit is a threat to the nation's long-term stability. Greenspan said the government's red ink is more cause for concern than other imbalances in the US economy, like the country's trade gap and household indebtedness. "The resolution of our current account deficit and household debt burdens does not strike me as overly worrisome, but that is certainly not the case for our yawning fiscal deficit," Greenspan said in prepared remarks to a conference given by the Federal Reserve Bank of Chicago.
"Our fiscal prospects are, in my judgment, a significant obstacle to long-term stability because the budget deficit is not readily subject to correction by market forces that stabilize other imbalances," Greenspan said.
Bureau Report