Federal Reserve worry list gets longer

(Reuters) - The U.S. Federal Reserve's list of worries may be getting longer.

A fading recovery, persistently high unemployment, Europe's debt troubles and commercial real estate losses have garnered most of the attention. But some Fed officials have begun talking more about another trouble zone -- recession-hit U.S. state and local government finances.

The problem is that they have to balance their budgets, unlike the federal government, which is running a deficit equal to more than 10 percent of total economic output.

"They have no choice but to cut spending or raise taxes -- or they get some more help from Washington," said Harm Bandholz, an economist with Unicredit in New York.

He thinks state and local government finances represent the most important domestic risk factor in the U.S. economy. Yet they received only two brief mentions in 19 pages of minutes from the Fed's April policy-setting meeting.

Minutes from the Fed's last meeting, on June 22-23, set for release on Wednesday, are likely to show the central bank trimmed its economic growth forecast, largely because of a run of disappointing data and fears of a European slowdown.

Read more: http://www.reuters.com/article/idUSTRE66A1YK20100711

Gee, none of us saw that one coming in early 2009....

:eyes:

All the cool kids drink kool-aid, clap their hands really hard and think happy thoughts.

this recession or whatever one chooses to call it anymore, but the last thing one will ever get on an official stance is smoke and mirrors IMO.

they are the root cause of our financial problems, the Fed itself and the crooked criminals that run the Fed

Further their career has advanced.

Good ol Timmy Geithner went from the Federal Reserve of New York to being the Head of The Treasury.Talk about rewarding the corrupt and incompetent.

Issue $100 Billion in INTEREST FREE bonds to be used only for rebuilding infrastructure. Maturing in 20 years or sooner.

Start a massive Jobs program to rebuild roads, schools, hospitals, water systems, electric, high speed rail, fiber optic internet to all towns big and small.

Return to the High Wage/High Tech Economy of the 50's and 60's.. before the Supply Sider's and the Wall Street Vampires got their hands on our manufacturing base and stripped it away.

China is about to surpass the United States in produciton of Maufactured goods. NO COUNTRY can be strong without manufacturing. We are in a world of shit... and 10,000 aircraft carriers in the Mid East are not going to solve the problem. Drone Bombs in Afghanistan are not going to solve the problem.

Our problems CAN be solved ...with the stroke of a pen.... if we only had a leader with vision and guts.

the answers are obvious, the Elites methods will only continue our downfall. Now if only we had a few politicians with the nerve to extract themselves from their pockets.

We need to tax the wealthy, nothing else will stop this. At least nothing that doesn't screw over millions of lower income people.

not being extended and the end of the housing tax credit will have big impacts.

The country will need another stimulus.