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From Fed chairman Ben Bernanke, answering a question about the “choke points” holding back the economy:
In the last year or two and going forward, we have been seeing fiscal consolidation, particularly at the state and local level….I understand these are necessary steps from the perspective of individual states and localities; I’m not criticizing that. It’s just a fact, though, that these contractions are affecting the pace of growth in the broader economy.
Bernanke said that other things affecting the pace of recovery included problems in Europe and a sluggish U.S. housing market.
