Billionaire investor Warren Buffett said the U.S. economy has avoided a meltdown and appears on a slow path to recovery, but Congress must now deal with enormous amounts of debt that threaten to erode U.S. purchasing power.

In an opinion column published on Wednesday by the New York Times, Buffett wrote that he resoundingly applauds actions by the Federal Reserve and the Bush and Obama administrations to pump trillions of dollars into the financial system.

But the gusher of federal money has run up a high level of debt that could fuel inflation, he said.

The United States economy is now out of the emergency room and appears to be on a slow path to recovery, Buffett wrote.

But enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects. For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself.

Buffett, who runs insurance and investment company Berkshire Hathaway Inc, likened the economic threat of greenback emissions to the environmental threat of greenhouse gas emissions, leaving the United States with a deficit of $1.8 trillion or 13 percent of gross domestic product this year.

In July, the government posted a $180.68 billion monthly budget deficit, a record for July, marking only the third time in the past 30 years that the government ran a deficit for 11 months in a row.

Buffett said a revived economy will not be able to generate enough revenues to bridge the gap between outlays and receipts, so changes in taxes and spending will be required.

Politicians will not likely have the will to raise taxes or slow spending, so they may opt to quietly let inflation increase, a move that will confiscate wealth and allow the United States to evolve into a banana republic economy, he said.

Our immediate problem is to get our country back on its feet and flourishing -- 'whatever it takes' still makes sense, Buffet said in the paper.

But once recovery is gained, Congress must end the rise in the debt-to-GDP ratio and keep its growth in obligations in line with its growth in resources, he wrote.

Unchecked carbon emissions will likely cause icebergs to melt. Unchecked greenback emissions will certainly cause the purchasing power of currency to melt. The dollar's destiny lies with Congress, he said.

Last month, in a newspaper column of his own, Federal Reserve chairman Ben Bernanke, said the huge amounts of money the U.S. central bank has pumped into the economy will not undercut its ability to push borrowing costs higher when the time is ripe.

Stressing that the weak U.S. economy will likely warrant exceptionally easy monetary policies for a long time to come, Bernanke outlined in a Wall Street Journal opinion article how the Fed could raise interest rates even with cash flooding the financial system.

At some point, however, as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road, Bernanke wrote.

The outline of the Fed's exit strategy from the extraordinary monetary policy easing it has undertaken in the past two years to deal with the global financial crisis was the subject of testimony to Congress by Bernanke in his twice-a-year economic report on July 21.

(Reporting by David Lawder in Washington and S. John Tilak in Bangalore)