Deficit disturbs Greenspan

AMERICA’S soaring federal budget deficits are a major obstacle to long- term US economic stability, Federal Reserve Chairman Alan Greenspan warned yesterday.

He said the deficit was a bigger worry than the soaring trade deficit or the high level of household debt, because those 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 stabilise other imbalances,” he said.