Fear and uncertainty are preventing companies from making long-term investments in America, says former Fed Chairman Alan Greenspan.

Meanwhile, investors could turn on the country on a moment's notice thanks to political unwillingness to tackle deficits, which would send markets tanking and interest rates soaring, Greenspan adds.

Short-term investments in goods and services like software are doing well, but long-term assets like "structures and buildings" reflect concern over the fate of the economy.

Editor's Note: The Final Turning Predicted for America. See Proof.

"If you want to learn what the degree of uncertainty is — and the level I've been using for quite a long period of time is to watch what corporate executives do, what proportion of their cash flow they choose to invest in long-term assets. That number in the early part of 2010 was at the lowest ratio since 1935," Greenspan tells CNBC.

"There were equivalent things in the noncorporate area, there's a significant type of contraction, very much for the same reasons in residential buildings. In short, there is a fear of the future."

Massive debts continue to stoke fears, and corporate executives know that markets can punish countries facing fiscal imbalances.

Unfortunately for the U.S., policymakers aren't facing long-term deficits with enough urgency.

"Almost every economist says we'll deal with the longer-term problem later, let's get to work now on short-term stimulus. That presupposes something they do not know, namely will the markets tolerate that? I know of no way you can make that judgment," Greenspan says.

"But to say implicitly that it's a 100 percent probability, that is wrong, and we don't have a Plan B."

Today, the yield on the 10-year Treasury is dropping to record lows as investors punish European assets out of fear and rush to the safety of U.S. government debt.

In Europe, yields in Spanish and Italian bond markets are soaring on fears the periphery eurozone countries are so indebted that financing them is becoming increasingly risky.

Central Bankers across the Atlantic are echoing Greenspan, calling for more urgency dealing with structural flaws plaguing the European economy.

European Central Bank President Mario Draghi has urged European leaders to fix the economy now, as the current setup is "unsustainable."

"The next step ... is basically for our leaders to clarify what is the vision for a certain number of years from now. How is the euro going to look ... in a certain number of years from now," Draghi told European Parliament, according to the AFP newswire.

"I think the sooner this is specified, the better it is."

Editor's Note: The Final Turning Predicted for America. See Proof.