Greenspan: Nation faces mountain of debt that it 'has never seen before'

Alan Greenspan cautioned Friday the U.S. faces a mountain of debt, the likes of which the country "has never seen before."

In an interview with Bloomberg Television, Greenspan, former Federal Reserve chairman, warned that the debt could dampen the economic recovery.

"There is basically this huge overhang of federal debt which we have never seen before," Greenspan said. "It is going to have a marked impact eventually unless it is contained, on long-term rates. That will make a housing recovery very difficult to implement and put a dampening on capital investment as well."

The Congressional Budget Office estimated that under President Barack ObamaBarack Hussein ObamaDemocrats make final plea for voting rights ahead of filibuster showdown Biden nominates Jane Hartley as ambassador to UK To boost economy and midterm outlook, Democrats must pass clean energy bill MORE's budget, the U.S. would have a $9.8 trillion deficit between 2011 and 2020.

"One of the unfortunate fallouts from these huge amounts of money that we're putting in the budget and the Fed is that $1 billion is not what it used to be," Greenspan said. "You cannot turn someone's debt down who is requesting $20 million or $400 million when we are talking trillions."