Gregg: 'We're going to be like a banana republic in 10 years'

The U.S. will resemble a "banana republic" in 10 years if its fiscal situation stays on the same track, Sen. Judd Gregg (R-N.H.) warned Tuesday.

Gregg, the ranking member of the Senate Budget Committee, asserted that programs like "cash for clunkers" would pile up to as much as 80 percent of the total U.S. economic output because of federal spending.

"We're going to be like a banana republic in 10 years!" Gregg said during a panel discussion on CNBC. "Sure, Americans want the program. But if you stop and think about it, is it right to do for our children?"

Gregg complained that the Congress was "spending the money twice" to extend the rebate program for new, fuel-efficient cars by having taken the money out of Department of Energy loans allotted for automakers, but then obligating those funds to be replenished.

The term "banana republic" usually refers to countries that are politically and economically unstable, and run by a small, powerful group.

"I just can't understand why we would set up a program that says, 'We're going to give you $4,500,' and then give the bill to your children," Gregg said.

He and other Republican senators appearing on CNBC -- Sens. Kay Bailey Hutchison (Texas) and Lamar Alexander (Tenn.) -- said that they would consider voting to extend cash for clunkers if the money were taken out of the $787 billion stimulus, but not replenished.