ECONOMY

Greenspan Blames Slow Economy on Debt Overhang: Federal Reserve Board Chairman Alan Greenspan said in Tokyo that high levels of private sector debt are responsible for the U.S. economy’s sluggishness, but that they do not pose a long-term structural problem. In comments before the Federation of Bankers Assn. of Japan and at a press conference, Greenspan said funds diverted by households and businesses to pay off debt would otherwise have been used in ways that promote economic growth. “The major problem is that households and businesses are confronted by a decline in asset values . . . and strapped balance sheets,” Greenspan said. The debt overhang is characterized by a rise in asset values financed by a significant increase in debt, followed by a fall in those prices that could create a debt overload, he said.