Greenspan Says Painless Solution to U.S. Debt is Fantasy

A U.S. budget agreement that includes debt reduction needs to be reached to revive economic growth, former Federal Reserve Chairman Alan Greenspan said.

“Unless we remove deep-seated uncertainties, the economy is not going anywhere,” Greenspan said today during a “Bloomberg Surveillance” television interview with Sara Eisen in Washington. The economy will “stay this way unless we remove a lot of the uncertainty.”

Greenspan said he supports the $2.5 trillion package of spending cuts and tax increases proposed by Erskine Bowles and Alan Simpson. An update of the plan, to be released today in Washington, includes $740 billion in increased revenue over the next decade that Republicans have deemed unacceptable and a higher eligibility age for Medicare that President Barack Obama has rejected.

“The most fundamental issue that needs to be addressed is getting the budget under control,” Greenspan said.

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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