Quote of note:

On Monday, the nonpartisan Congressional Budget Office published new calculations showing that the budget deficit now stems almost entirely from tax cuts and spending increases rather than from lingering effects of the economic slowdown.

Another Quote of Note:

Adjusted for inflation, the average family's debt, including a mortgage, has climbed from $54,000 in 1990 to $79,000 last year. Mortgage foreclosures, credit card delinquencies and personal bankruptcies are all at near record levels.

Mr. Greenspan's view is that household balance sheets are "in good shape," and perhaps stronger than ever, because the value of people's homes and stock portfolios have risen faster than their debts.

And another:

But the main reason for that new wealth has been rising prices for real estate and stock, and those prices have climbed in large measure because interest rates are at their lowest level in more than 40 years.

… "The day of reckoning is not now, but maybe five years from now," said James W. Paulsen, chief investment strategist at Wells Capital Management. "To go down Greenspan's route is like saying there is a free lunch. The fallacy is that net worth has gone up because debt went up. And that doesn't give me a good feeling."

Greenspan Shifts View on Deficits

By EDMUND L. ANDREWS
ASHINGTON, March 15 —Consumer debt is hitting record levels. The federal budget deficit is yawning ever larger. The trade gap? Don't even ask.

Many mainstream economists are worried about these trends, but Alan Greenspan, arguably the most powerful and influential economist in the land, is not as concerned.

In speeches and testimony, Mr. Greenspan, chairman of the Federal Reserve Board, is piecing together a theory about debt that departs from traditional views and even from fears he has himself expressed in the past.

In the 1990's, Mr. Greenspan implored President Bill Clinton to lower the budget deficit and tacitly condoned tax increases in doing so. Today, with the deficit heading toward a record of $500 billion, he warns more emphatically about the risks of raising taxes than about shortfalls over the next few years.