Greenspan: U.S. 'Way Underestimating' the National Debt

“Mexico, who we make fun of, has one of the best run governments in North America. They have a declared budget. Their debt as a percentage of GDP is miniscule compared to ours. They don’t run deficits more than 2.5 percent. They’re liberalizing their infrastructure. They become an exporting powerhouse. They have a totally independent central bank,” he said.

According to Greenspan, entitlement spending in the U.S. was 4.7 percent of GDP in 1967 compared to more than 14 percent today.

“Had we kept it at that level, our productivity would be far higher today. The average wage would be very significantly higher, the standard of living would be higher and what we have to do is think about how we are going to shrink that pie back and, to me, that is the single most important problem that confronts this country,” he said.