A rather stale and well-tread outlook on the economy and monetary policy is offered in the FRBSF’s July Economic Letter, as sound and reasonable as it is. Essentially, the economy is recovering, but at a snail’s pace. Here are the reasons why:
- government fiscal policy (raising taxes, cutting spending) is threatening continued growth; and
- instability in the Eurozone, coupled with stagnating austerity measures, continue to put the brakes on the U.S. economic recovery.
What’s to be done? A continuation of Operation Twist, the Fed’s creative bond buying program designed to lower long-term interest rates, and another possible round of quantitative easing to inject more cheap cash into the banking system and encourage consumer lending.
It sounds as if it is business as usual. Do you have an opinion as to how our local economy here in Nevada County is doing?