Wisconsin bankers and business leaders are getting encouraging advice from national economic forecasters.The president of the Federal Reserve Bank of St. Louis and a leading economist for JPMorgan Chase both say they're cautiously optimistic that the U.S. economy will continue its gradual rebound this year.
The two spoke at two different financial conferences held in Madison last week. James Glassman from JPMorgan Chase told members of the Madison International Trade Association he's confident Congress will reach agreement on tax and deficit issues. He says if the debate shifts to health care spending reform the markets will respond positively, "Whether that means raising retirement age for Social Security, change the indexation, try to figure out how to cap the growth the health care spending for Medicare and Medicaid. If that happened, you'd see the stock market explode."
Glassman's concern about health care spending is echoed by Governor Scott Walker. He says unless the state is granted more control over capping federal health care costs his efforts to keep the state budget balanced will be crippled, "The way the system is now really takes a large portion of the decisions out of the hands of the governor and the legislature and people here in the state. I mean you're talking about $700 million potentially just cost of continuing for Medicaid-related programs in the state."
The forecast from the president of the St. Louis Federal Reserve Bank made no mention of health care costs. Speaking at the Wisconsin Bankers Association gathering last week James Bullard predicted a slow and gradual improvement in the U.S. economy and little change in unemployment numbers through the end of 2013.