Rural Utah's economic future is tied to the world economy, especially regarding changes in U.S. farm subsidies and the interest rate.
Irving R. Levine, chief economic correspondent for NBC News, explained how global events can affect the rural economy in the keynote address for the Project 2000 conference "Rural Utah's Economic Future." The conference was at Utah Valley Community College Tuesday.Levine said the federal deficit has largely been fueled by Japan and Germany.
With less money flowing into the United States, Levine said, the price of money - the interest rate - will go up.
Countering upward pressure on the interest rate is the Federal Reserve's commitment to head off a possible recession. Levine said we are not yet in a recession, by the strict definition that says the economy must be in a downturn for two consecutive quarters.
He described the economy as "anemic" with slow growth. But he said American companies will find a recession easier to ride out now than in the early '80s because businesses are "lean and mean."
Inflation is a threat, particularly if there is war in the Middle East. Levine said war is looking more certain and will mean an increase in the price of oil, accompanied by general inflation in the economy.