Greenspan Warns That Deficits Are Unsustainable
By JENNIFER BAYOT
Published: April 21, 2005

Alan Greenspan, the chairman of the Federal Reserve, warned Congress today that the federal budget is on an "unsustainable path" as a result of rising demands on Social Security and Medicare and government spending on new programs.

Unless Congress makes major changes in how it makes the budget, he said, the country will run deficits large enough to cause the economy "to stagnate or worse."

In 2004, the federal budget ran a deficit equal to about 3.5 percent of the nation's gross domestic product, Mr. Greenspan said, while the size of federal debt relative to G.D.P. has "risen noticeably" since bottoming out in 2001.