The debt and deficit problem in the US is so serious that former Federal Reserve Chairman Alan Greenspan finds himself in the position of recommending the highest tax rates in more than a decade.
In an interview with CNBC, the former central bank chief described himself as a "small government, free-market economist" who nonetheless believes that in order to raise revenue and close the debt gap, 1990s-era taxes must be reinstituted.
It's a measure, he said, of how serious the problem has become.
"The fact that I am in favor of going back to the Clinton tax structure is merely an indicator of how scared I am of this debt problem that has emerged and its order of magnitude," he said.
The marginal tax rates fell in the early 2000s under former President George W. Bush, who instituted sweeping cuts that last year were renewed in a deal between President Barack Obama and congressional Republicans.
But the rates, particularly those on Americans earning more than $200,000 a year, have been the focus of intense debate and are considered in peril depending on how next year's elections go. Congressional Democrats see higher taxes as a key to raising revenue to close the budget gap.
Greenspan expressed concern over the tenor of negotiations in Washington. He also endorsed the deficit cuts from Rep. Paul Ryan (R.-Wisc.) that have run into strong opposition due to targeting Medicare and Medicaid.
"If I had my own way, I like the Ryan budget in all respects and I think that essentially that sort of thing is what I would vote for if in fact we're voting," he said. "But the problem essentially is that is not going to get a majority vote in Congress or be signed by the president of the United States. The question is, what's my fallback position?"
Telling America's aging population that its entitlement programs such as Social Security and Medicare will survive without significant changes is dishonest, Greenspan added.
"It's not an issue of saying we're going to have a choice for what we're going to do. We don't have the physical resources," he said. The government is telling people "they're guaranteed their medical services, and I think that's not accurate. We cannot do that granted our lack of resources."
Yet Greenspan said Congress has no choice but to approve raising the debt ceilingas the US would risk catastrophe if it does not meet its obligations.
"The problem is we're all going and maneuvering around and as the days pass we're getting closer and closer to the debt ceiling," said Greenspan, who called Washington brinkmanship on the issue an "extraordinarily dangerous problem for this country."
"What's happening now is that there's a realization of how serious this problem is and everyone is coming together to talk," he said. "But compromise...?"