US economy sound but Fed worries about budget
Reuters, New York
The US economy is on a good footing and inflation is stable, but the country's large budget deficit and low savings rate are significant problems that must be addressed, Federal Reserve officials said Wednesday.Federal Reserve Chairman Alan Greenspan warned about the dangers the budget shortfall posed to the economy in his testimony to the House of Representatives Budget Committee. "You cannot continuously introduce legislation which tends to expand budget deficits because down the road the impact of an ever-rising deficit, especially as a percent of GDP, creates some significant weakness in the structure of the economy," he said.
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