How the U.S. addresses the economic challenges it faces will determine the length and depth of the current recession, according to Federal Reserve Bank of Kansas City president Thomas M. Hoenig. “There are no shortcuts to stability, no painless methods to adjusting our saving-spending mix and returning to prosperity,” he warned yesterday.

He recalled that in his previous speech before the Central Exchange a year ago, he suggested the country could avoid a recession. “The sad truth is that over the past year, the economy has been affected by several shocks — the further decline in housing, the turmoil in financial markets, and a sharp drop in consumer and business confidence,” according to prepared text of the speech released by the Fed.

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