Federal Reserve Chairman Alan Greenspan warned yesterday, during a Federal Reserve banking conference, that rising budget deficits, insufficient domestic savings and efforts to impede international trade are combining to threaten the nation's economy. He warned that the budget deficit is projected to climb to 4.25 percent and the trade deficit to 5 percent of the GDP. Despite the grim numbers, Greenspan noted that not all segments of the economy have been hurt and in an address to Congress he stated he was optimistic about the economy's performance over the next year or two.
See "Federal deficit termed a threat - No 'free lunch,' Fed chief warns", Mark Skertic, Chicago Tribune, May 6, 2004