Per la precisione...
Greenspan-higher debt leads to higher rates
Wed Sep 8, 2004 11:47 AM ET
WASHINGTON, Sept 8 (Reuters) - Increased U.S. debt levels would lead eventually to higher interest rates, Federal Reserve Chairman Alan Greenspan told Congress on Wednesday, and urged that debt should be kept as low as possible.
Greenspan agreed with a lawmaker who asked whether "much higher interest rates" are the likely result of growing U.S. debt levels.
"That's correct, congressman," the Fed chairman said. "Federal Reserve studies have indicated over the years, and more recently in some fairly sophisticated analyses, that if you get to a point of fairly significant long-term structural budget deficits, it begins to impact on the level of long-term interest rates, which in turn of course creates higher levels of interest payments and therefore higher deficits."
Current fiscal policy should try to keep the debt level down as low as possible, he told the House of Representatives Budget Committee.
"We're going to be running into very severe pressures in later years, and the better we are prepared in moving into that period, the more likely it is that we will address it in a rational, sensible rational way," he said.