Greenspan Warns Deficit Could Wreck Economy

The administration’s own Federal Reserve Chairman, Alan Greenspan, warned this week that “The persistence of bloated U.S. trade deficits over time can pose a risk to the U.S. economy.” So far, Greenspan said, foreigners have been willing to lend the U.S. money to finance the current account imbalances, but “at some point foreigners might suddenly lose interest in holding dollar-denominated investments.

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