JACKSON HOLE, Wyo. (CNNfn) - The U.S. government must not promise benefits to aging baby boomers that it cannot afford, because that could mean painful future adjustments to taxes and spending, according to Federal Reserve chairman Alan Greenspan.

"As a nation we owe it to our retirees to promise only the benefits that can be delivered," Greenspan said in opening remarks at a Fed symposium in Jackson Hole, Wyoming.

In fact, Greenspan said he fears that the government has promised more than it can deliver and that it must "recalibrate" its public programs -- like Medicare and Social Security -- so that people who are getting ready to retire will have time to "adjust through other channels," an apparent warning that baby boomers may have to spend less or save more in order to afford retirement.

"If we delay, the adjustments could be abrupt and painful," Greenspan said. "Because curbing benefits once bestowed has proved so difficult in the past," he added, government policymakers "must be especially vigilant to create new benefits only when their sustainability under the most adverse projections is virtually ensured."

Greenspan spoke at the opening of a two-day symposium on Global Demographic Change: Economic Impacts and Policy Challenges, sponsored by the Federal Reserve Bank of Kansas City.

The impact of the aging U.S. population will have a profound impact on the nation's fiscal situation, Greenspan said. He said it will be much easier to address the chronic deficit in the Social Security account than to address the shortfalls in the Medicare program which will be "much larger and much more difficult to eliminate."

"The combination of rapidly advancing medical technologies and our current system of subsidized third-party payments suggests continued rapid growth in demand, though future Medicare costs are admittedly very difficult to forecast," he said.

The challenge of funding retirement programs like Social Security and Medicare loom at the same that the U.S. budget deficit has swelled to record levels. Democrats have criticized the Bush administration for pushing through tax cuts that added to the deficit, while Republicans argue the deficit will shrink as tax cuts encourage greater investment and saving.  

Kathleen Hays anchors CNN Money Morning and The FlipSide, airing Monday to Friday on CNNfn. As part of CNN's Business News team, she also contributes to Lou Dobbs Tonight.