From an address to the House Budget Committee on Wednesday, Federal Reserve Chairman Alan Greenspan defied analyst predictions and was hawkish on the deficit:
“You cannot continuously introduce legislation which tends to expand budget deficits because down the road the impact of an ever-rising deficit, especially as a percent of the GDP, creates some significant weakness in the structure of the economy […] Addressing the government’s own imbalances will require scrutiny of both spending and taxes. However, tax increases of sufficient dimension to deal with our looming fiscal problems arguably pose significant risks to economic growth and the revenue base.”
Plain and simple translation: stop spending more money than you collect from taxes. Congress responded by slapping it’s forehead so hard its brain flew out the back.