Fed Chairman Alan Greenspan is calling for Congress to cut spending. He says that while the economy is growing, government spending continues to be a huge problem. Oh, and he also says that tax hikes are not the way to go.

The U.S. economy is growing at a "reasonably good pace," Federal Reserve Chairman Alan Greenspan said on Wednesday, but he warned dangerous budget deficits must be fixed, preferably through spending cuts.

"When you begin to do the arithmetic of what the rising debt level implied by the deficits tells you, and add interest costs to that ever-rising debt at ever-higher interest rates, the system becomes fiscally destabilizing," Greenspan told the House of Representatives Budget Committee.

"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," he said.

While higher taxes boost government revenues, they also deplete consumer coffers, dampening economic growth and spending -- strains the economy can ill afford as the baby boom generation retires and the proportion of workers shrinks, he said.

Actual budget cuts just don't happen in this country. Even though Democrats are chiding Bush for proposing "deep cuts" in this year's budget, the fact of the matter remains that every single government program receives more funding than it did last year.

A cut, in newspeak, just means that they didn't get as big of an increase as they wanted. If Congress wants a 6% increase and they only get 3%, that's called a cut. And you wonder why the deficit is so big?