Compared to Economists, Governors Are Debbie Downers

from Minyanville:


Compared to Economists, Governors Are Debbie Downers
By Richard Suttmeier Feb 23, 2010 9:10 am

As they try to balance their state budgets, they say the worst is yet to come.


The National Governors Association was generally downbeat on the US economic outlook at a weekend meeting reflecting the view that the worst is yet to come.

In total, states' budget deficits will total $134 billion over the next three years. Tax collections are declining while costs such as Medicaid soar. High unemployment persists on Main Street, USA.

Most states are required to balance their budgets and shortfalls must be covered by higher local taxes or cutting services, which means more layoffs ahead.

While state governors worry about Main Street, Wall Street economists say that the US economic recovery will continue for the next two years, but with slow job growth.

It will be difficult to have a healthy recovery with unemployment above 9%, sluggish consumer spending, and with Main Street trying to get out of debt.

I disagree with the National Association of Business Economists (NABE) with regard to the housing market, which it says will continue to rebound.

I'm looking for a double dip led by housing and the building book of bad loans on and off the balance sheets of community and regional banks. ..........(more)

The complete piece is at: http://www.minyanville.com/businessmarkets/articles/governors-downbeat-worst-to-come-wall/2/23/2010/id/26967