Greenspan worries about U.S. debt, not dollar slide

NEW YORK, Oct. 15 (Xinhua) -- Former Federal Reserve Chairman Alan Greenspan said he is more worried about the increasing U.S. debt than the weakening dollar during a meeting here on Thursday.

Former Federal Reserve Chairman Alan Greenspan speaks at the Council  on Foreign Relations in New York, the U.S., Oct. 15, 2009. Greenspan  said on Thursday that he was more worried about the increasing U.S.  debt than the weakening dollar, which recently hit a 14-month low. (Xinhua/Gu Xinrong)

Speaking at the Council on Foreign Relations in New York, Greenspan said he is "not overly concerned" about the most recent decline in the dollar, which has hit a 14-month low against the euro and other major currencies.

"Remember, the dollar surged when the crisis began as we still conceive dollar as safe heaven. We are now back to the levels just prior to the crisis," he said.

Meanwhile, Greenspan expressed grave concern about the long-term costs to the United States from the increasing national debt, which according to him is the "most worrisome aspect of the economic agenda in the United States."

In long term, government budget deficits would likely be even bigger than current record estimates, and the deficits would continue to put downward pressure on the currency and upward pressure on borrowing costs, Greenspan said.

"It will begin to affect the yield on long-term interest rates," he said.

Greenspan said it is difficult to determine whether what happened in the past few years is a once-in-a-century type of event or just a repeat of periodical breakdown in the system.