Federal Reserve Chairman Alan Greenspan says investors are worried about the government deficit levels and that corporate executives "fear the future."
But Greenspan said he worries that economists lack a sense of urgency about getting the deficit spiral under control. Without fiscal discipline, the market can push rates higher rapidly if confidence wanes in the government's ability to get a handle on the problem.
"Almost every economist ... says we'll deal with the long-term problem later, let's get through now on short-term stimulus," he told CNBC's "Squawk Box." "That presupposes something they do not know, namely, will the market tolerate that. And I know of no way you can make that judgment.
"I'm not even sure I'd say necessarily that they're wrong,” Greenspan said. “But to say implicitly that it's a 100 percent probability, that is wrong, and we don't have a plan B."
The "deal with it later" deficit mentality is what will prevent corporate executives, business owners large and small, employers of all sizes and investors to simply maintain, not expand, not invest long-term, not increase their employee count, bringing the economy to a standstill when it needs major growth.
He said there are two economies, one of which is growing and creating jobs and the other, comprised of "structures and buildings, and they are operating at half of operations."
"Watch what corporate executives do, what proportion of their cash flow they choose to invest in long-term assets," Greenspan said. ""In short, there is a fear of the future, and when you begin to try to disaggregate what's causing that you come up with probably 40 percent of it is the fact that the economy is sagging."
The equation is actually very simple, no matter how difficult so-called economists try to make it.
Who hires people? Who invests money? Who helps the economy grow?
The business owners, executives and investors or the economists that sit on their butts and run figures while not contributing to job growth or economic conditions at all?
Which group of people's fears should be addressed? The ones that can make a difference or the ones who throw theoretical advice out there and hope they are right?