America's soaring federal budget deficits represent a major obstacle to the country's long-term economic stability, Federal Reserve Chairman Alan Greenspan warned on Thursday.
Greenspan told a banking conference that the federal budget deficit was a bigger worry to him than America's soaring trade deficit or the high level of household debt because those two problems can be corrected by market forces.
"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," he said in remarks to a banking conference.
Greenspan noted that the federal deficit, estimated to climb above $500 billion this year, will amount to 4.25 percent of the total economy after being in surplus just a few years ago.
It wasn't simply the surplus. It deserves a name. It was the Clinton surplus, an actual bipartisan accomplishment led by a Democrat.
Bush is the man responsible for our present record deficits with the unique combination of his limitless "War on Terror" (in a country with imaginary WMDs) with ultra-generous tax breaks for his wealthiest backers. Now Greenspan quite literally accuses him of destabilizing the United States with his lack of sound budgetary leadership.
Ironically, the last two presidents to preside over record deficits thanks to their failed economic policies were both Republicans, both warmongers with a fixation on Saddam Hussein, and both named Bush.
