Greenspan Says Uncertainty over War Harms US Economic Growth

Home>>World

Last updated at: (Beijing Time) Wednesday, February 12, 2003

Greenspan Says Uncertainty over War Harms US Economic Growth

US Federal Reserve (Fed) Chairman Alan Greenspan on Tuesday said uncertainties about a war with Iraq represent the biggest cloud hanging over the struggling US economy.

DISCUSSION

CHINESE

SEND TO FRIEND

US Federal Reserve (Fed) Chairman Alan Greenspan on Tuesday said uncertainties about a war with Iraq represent the biggest cloud hanging over the struggling US economy.

"The intensification of geopolitical risks makes discerning theeconomic path ahead especially difficult," Greenspan said in a prepared testimony to the Banking Committee of the US Senate.

Presenting the Fed's semi-annual economic report to the Congress, the Fed chairman said if "these uncertainties diminish considerably in the near term," then businesses in the United States may boost their investment spending and help the economy.

Underscoring the cautiously optimistic outlook, Greenspan released a Fed economic forecast that projected the overall economy would grow at a rate of 3.25 percent to 3.50 percent this year. That would mark an improvement from growth rate of 2.4 percent in 2002.

Greenspan also called on the US Congress and the Bush administration to exercise fiscal discipline in light of swelling future federal budget deficits.

"There should be little disagreement about the need to re-establish budget discipline," he said.

The US government projected last week a record budget deficits of 304 billion US dollars in this year and 307 billion dollars next year.

Greenspan called that "sobering," especially in light of the looming retirement of the Baby Boom generation, which will place unprecedented demands on the Social Security system in the United States.

In his testimony, Greenspan did not specifically discuss Bush'snew tax cuts. But he did address the argument made by the president's tax-cut supporters, who say reducing taxes would generate enough new economic growth to take care of the deficit problem.

"Short of a major increase in immigration, economic growth cannot be safely counted upon to eliminate deficits and the difficult choices that will be required to restore fiscal discipline," Greenspan said.

Greenspan said to get control of the deficit problem will require that US Congress exercise restraint in spending and in taxcuts.

Questions?Comments? Click here

US Fed Chairman Says Economy is Growing Stronger

US FED Chairman Alan Greenspan Gets British Knighthood

Greenspan Believes US Economy "to Start Accelerating"

Spring festival vs.Christmas in the eyes of Chinese youth ( 9 Messages)

China to Train First Psychologists ( 2 Messages)

Japan's Economy: The Largeness of Ship Makes It Hard to Veer Around ( 3 Messages)

Chinese FM Calls for Political Settlement of Iraq issue ( 11 Messages)

Bush Vows to Disarm Iraq by Force if Necessary ( 31 Messages)

Saddam Says Iraq Ready to "Defeat" US Troops ( 31 Messages)