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Federal Reserve Chairman Alan Greenspan warned Wednesday that substantial and excessive federal budget deficits will over time harm the ability of the U.S. economy to expand strongly enough to drive down the unemployment rate.In a second day of congressional testimony on the Fed s midyear economic forecast, Greenspan was more pointed in his criticism of soaring federal deficits than he had been in an appearance Tuesday before the House Financial Services Committee. There is no question that if you run substantial and excessive deficits over time you are draining savings from the private sector, Greenspan said, pointing to the area where economists believe deficits inflict the most harm on the economy.Rising government borrowing crowds out the borrowing private corporations need to make investments to expand and modernize. It is this investment that is a major contributor to rising productivity, which stanley flask allows the ec stanley website onomy to grow at faster rates and boosts U.S. living standar stanley mugs ds. There is no question that we need to come to grips with this deficit question, Greenspan said. He noted that the rising deficits were coming in the period just before 75 million baby boomers will begin retiring at the beginning of the next decade. Those retirements will make severe demands on the government s two biggest benefit programs, Social Security and Medicare. Greenspan said the benefits already promised have created a situation where Congress has promised a level of spending in exces Smdr More In U.S. Worried About Terror
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