US Economy Good But Serious Risks Ahead, says Central Bank Chief
Barry Wood

The head of the U.S. central bank, Alan Greenspan, Wednesday told a congressional committee that the prospects (前景) of the U.S. economy are good, but that there are serious risks ahead.

Mr. Greenspan said 2003 appears to have been a transition year（过度年） for the U.S. economy, going from sub-par（不够标准的） performance to more vigorous growth（强劲增长）. The 77-year-old central bank chief said as the expansion gathers pace（加快速度） so too will the pace of employment growth, which he said has been held back（被……挡住） by productivity gains and a business drive to increase efficiency.

Mr. Greenspan identified higher oil prices, a declining dollar, and lack of action to bring down（降低） the growing budget deficit（预算赤字） as risks facing the economy. On the deficit, the Federal Reserve Board chairman deplored what he sees as absence of a credible plan to bring down the record high fiscal deficit（财政赤字） that has reached over $500 billion and shows no sign of declining. He also voiced a clear preference for（表示要给予……优先考虑） spending reductions over tax increases as a means of narrowing the deficit（降低赤字）.
"We ought to be looking at getting as much as we can in the longer run（从更为长远的观点来看） in the way of expenditure restraint（节省开支） before we look at the issue of filling the gap（填补缺口） on the tax side in order to get a viable fiscal policy."

Mr. Greenspan suggested that short-term interest rates can remain at their current very low levels for a bit longer. But eventually, he said, rates must rise.

"The real federal funds rate will eventually need to rise toward a more neutral level. However, with inflation very low and a substantial slot in the economy, the Federal Reserve can be patient in removing its current policy accommodation（政策上的迁就）."

Mr. Greenspan said the dollar had undergone a very substantial decline（经历了急剧的下跌） on currency exchange markets during the course of 2003. But he said the inflationary impact of such a decline has been muted by competitive pressures that keep businesses from increasing prices.

Mr. Greenspan's overall message is that the U.S. economic outlook（经济前景） has improved significantly in the past eight months. But he is clearly worried by the growing budget deficit (财政赤字) and he also voiced concern（表达了关注之情） that at some point foreigners may no longer be willing to finance the still very large U.S. trade deficit（贸易赤字）.