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MERCER: SD economy puzzles economic council

PIERRE -- Doug Sharp, of Watertown, made a suggestion a few days ago, during the meeting of state government's Council of Economic Advisors. The conversation had steered to what might cause a recession in South Dakota. Sharp, who's in the busines...

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PIERRE - Doug Sharp, of Watertown, made a suggestion a few days ago, during the meeting of state government's Council of Economic Advisors.

The conversation had steered to what might cause a recession in South Dakota.

Sharp, who's in the business of selling cars and trucks, wanted perspectives from others on the council about what they sense within their respective specialties.

"We almost need to go by industry," Sharp said. "I'm just trying to figure out what's going to affect South Dakota."

Dan Noteboom, of Corsica, who sells farm equipment, said one trend he's seeing is technology and more technology.

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Noteboom talked about the danger that South Dakota farmers could lose financial competitiveness in the global economy during the years ahead if, for example, they continue applying chemicals to entire fields.

The latest trend, he said, is equipment that identifies weeds and then puts products only on those pieces of ground.

Another council member, Curt Everson, of Pierre, is president for the South Dakota Bankers Association. He said South Dakota had 152 banks chartered in 1980. Today there are 60.

The numbers on the screens at each end of the room showed employment in financial services had bumped up and down, but didn't change much overall, since 2015.

"You're going to just continue to see bank consolidation," Everson said. "Corporate restructuring always brings about that possibility."

Everson was state commissioner of finance and management before he moved to the banking post. He said the 2018 federal farm bill is one unknown that could significantly help or hurt South Dakota in the immediate future.

Everson also referred to the spending by employees and employers to comply with the mandate in the federal Affordable Healthcare Act - aka Obamacare - that most adults must have some type of health insurance or pay a stiff penalty.

There seemed to be agreement among the men that insurance companies are getting the blame even though health care providers are raising prices.

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Where the different voices came together most, though, was their common belief that federal debt poses a genuine danger.

It represented 35 percent of the U.S. gross domestic product in 2007. By 2013 it had skyrocketed to 70 percent. That's where it still is - and it worried the men around the table.

"The balance sheets are a lot weaker than years ago," said John Hemmingstad, a council member from Elk Point.

He was one of several who spoke of President Trump's disruption of the North American Free Trade Act. With NAFTA in play, Canada and Mexico now are on edge. NAFTA is important for South Dakota's livestock and crop producers.

"It's been challenging," Hemmingstad said the overall circumstances. He said he wasn't coming from a Democratic view or a Republican view. "All these things seem self-inflicted."

Everhardus Van der Sluis, a professor of economics at South Dakota State University, said he is "more pessimistic" about the general financial direction. He listed trade, China, over-investment and global turmoil.

"Everybody for himself," Van der Sluis said, "it's not the way we can run the world, I don't think."

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