KABUL, Nov 19 (Reuters) – Afghans in two crucial southern provinces are almost completely unaware of the Sept. 11 attacks on the United States and don’t know they precipitated the foreign intervention now in its 10th year, a new report showed on Friday.

NATO leaders gathered in Lisbon for a summit on Friday where the transition from foreign forces — now at about 150,000 — to Afghan security responsibility will be at the top of the agenda, with leaders to discuss a 2014 target date set by Kabul.

Few Afghans in Helmand and Kandahar provinces, Taliban strongholds where fighting remains fiercest, know why foreign troops are in Afghanistan, says the “Afghanistan Transition: Missing Variables” report to be released later on Friday.

The report by The International Council on Security and Development (ICOS) policy think-tank showed 92 percent of 1,000 Afghan men surveyed in Helmand and Kandahar know nothing of the hijacked airliner attacks on U.S. targets in 2001.

“The lack of awareness of why we are there contributes to the high levels of negativity towards the NATO military operations and made the job of the Taliban easier,” ICOS President Norine MacDonald told Reuters from Washington.

“We need to explain to the Afghan people why we are here, and both convince them and show them that their future is better with us than the Taliban,” MacDonald said.

The report said there was a continued “relationship gap” between Afghans and the international community, describing the lack of understanding as “dramatic”.

U.S.-backed Afghan forces toppled the Islamist Taliban government in late 2001 for sheltering al Qaeda leaders who plotted the 9/11 attacks that killed about 3,000 people.

The war has now dragged into its 10th year and violence is at its worst, despite a record number of foreign troops, with military and civilian casualties at their highest levels.

EXIT TIMETABLE

Attention is now focused on an exit timetable. U.S. President Barack Obama, who will review his Afghanistan war strategy next month, wants to begin withdrawing U.S. troops from July 2011.

European NATO leaders, under pressure at home to justify their continued commitment to an increasingly unpopular war, are following a similar timetable. Some are withdrawing troops and others are looking to move from combat to training roles.

While Afghan President Hamid Karzai has set a target of 2014, NATO’s civilian representative in Afghanistan, Mark Sedwill, said this week “eye-watering levels of violence by Western standards” might mean the transition spills into 2015.

That throws the emphasis back on the Afghan government — widely seen as so corrupt and inept that it is unable to support itself — and the readiness of Afghan forces to take over.

The ICOS report showed 61 percent of respondents in Helmand and Kandahar believe Afghan security forces would not be able to provide adequate security when foreign forces withdraw, and that 56 percent believe the Afghan police are helping the Taliban.

It noted there was clear “potential for the Afghan security forces to switch sides” after being trained by NATO forces.

The report said 81 percent of those interviewed in the south thought al Qaeda would return to Afghanistan if the Taliban regained power, and that 72 percent thought al Qaeda would again use the country to launch attacks against the West.

ICOS senior policy analyst Jorrit Kamminga said the “negative blowback” of the foreign presence could be managed by addressing the chronic poverty, food shortages, unemployment and displacement faced by ordinary Afghans.

The report noted improvements in some areas of the south, with the number of people in Marjah, a key battleground in Helmand, who thought NATO-led forces were winning the war almost doubling to 64 percent between June and October 2010.

It was also a very different picture in the north, with 80 percent of 500 men interviewed in Parwan and Panjshir provinces thinking the central government was protecting their interests.(Editing by Sugita Katyal) (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)

This is undermining efforts to stem the outbreak that has claimed nearly 1,200 lives and affected at least 20,000 people, the agency said. MSF urged the different groups and agencies present in Haiti to step up the size and speed of their efforts to ensure an effective response to the needs of people at risk of cholera infection.

“There is no time left for meetings and debate – the time for action is now,” Head of MSF’s Haitian mission Stefano Zannini said in a statement. He also said more help is needed to to treat the sick and implement preventative actions, especially as cases increase dramatically across the country.

The agency said efforts must be put to actions including reassuring the population by educating them about the low risk of the disease, providing safe and chlorinated water and soap, building latrines and establishing proper waste removal and management. Further, an efficient network of cholera treatment centres must be established and safe removal and burial of dead bodies must be ensured, MSF said.

Cholera, a disease completely unknown in Haiti, is an acute diarrhoeal infection spread through contaminated water or food. It is an easily treatable disease, but can kill within hours if left untreated. According to the World Health Organisation, up to 80% of people can be treated successfully through prompt administration of oral rehydration salts and the very severely affected ones using intravenous fluids.

The disease was first reported in the central province of Artibonite of Haiti on October 19. The epidemic has since spread across all the 10 provinces of the impoverished Caribbean nation, including the capital Port-au-Prince.

MSF has set up more than 20 cholera treatment facilities throughout Port-au-Prince, in the Artibonite region, and in the north of Haiti and have treated more than 16,500 people from October 22 to November 14.

Haiti’s health ministry said Friday that the death toll in the ongoing cholera outbreak in the country has risen to 1,186, indicating that more than 80 Haitians have died of the disease since the last update a day earlier.

Violent protests erupted in the Haitian capital this week with most incidents of violence being directed at United Nations peacekeepers who the protesters accuse of being responsible for bringing the deadly cholera to their impoverished island nation. Protesters allege that the Nepalese UN peace-keepers were responsible for the cholera outbreak.

The UN mission in Haiti has called for an immediate end to the violent demonstrations, stating that the unrest was hampering ongoing international efforts to halt the spread of the cholera epidemic in Haiti’s northern regions, where deaths are climbing, and providing proper treatment to the infected people.

by RTT Staff Writer

We actually live in a spiritual and literal community; we celebrate the Lords Supper every day together. We are presently living as the book of Acts depicts the early family of God living, and have been doing so for nearly 4 years.

The rest of the story will be told here in the upcoming days, weeks and months Lord willing. We believe that the testimony of Jesus Christ is “still” being written and that we are among His living epistles. His epistles are written not with ink, but with the Spirit of the living God, on tablets of human hearts.

And you thought the bible was all there is to this great Living God…Jesus Christ, humanities Messiah?

The Work of the Ecclesia

This is a simplistic look at the concept of the “purpose of the ecclesia.” There is no other organism like it; it is not a “church,” or a religious practice that is governed by man. Regardless of what one’s idea of the entity that Yahshua Himself is building, the “ecclesia – the assembly of His chosen & called ones” looks and lives by a standard set by the Messiyah Himself.

Contrary to popular religious thinking, Yahshua’s assembly is not in line with the prevailing culture. Yet the religiously educated of our day say that it must be “culturally relevant” in order for it to be appealing, attractive or important to people today. I disagree with all of that. Let me give you an example of why I disagree.

“Now when they had traveled through Amphipolis and Apollonia, they came to Thessalonica, where there was a synagogue of the Jews. And according to Paul’s custom, he went to them, and for three Sabbaths reasoned with them from the Scriptures, explaining and giving evidence that the Christ had to suffer and rise again from the dead, and saying, “This Jesus whom I am proclaiming to you is the Christ.” And some of them were persuaded and joined Paul and Silas, along with a large number of the God-fearing Greeks and a number of the leading women. But the Jews, becoming jealous and taking along some wicked men from the market place, formed a mob and set the city in an uproar; and attacking the house of Jason, they were seeking to bring them out to the people. When they did not find them, they began dragging Jason and some brethren before the city authorities, shouting, “These men who have upset the world have come here also; and Jason has welcomed them, and they all act contrary to the decrees of Caesar, saying that there is another king, Jesus.” Acts 17:1-7 NASB (Emphasis mine)

Obviously the Jews were not happy with the message of Paul and Silas; it made them jealous, and caused them to attack the house of Jason and Jason himself. What was stirring the anger of the people is clear; they were saying that “these men (Paul and Silas) had upset the world.” That is an amazing accusation to make, and I believe that they were right, here’s why.

The message of the Kingdom of God on earth was and is a real problem for the world back then as it is now. Notice it was generally the religious (Jews) back then who struggled with the gospel of the kingdom message and it’s the same today, it’s the religious (Catholics and protestants.) Read on and you will see what I am saying clearly.

The passage does not stop with the statement that Paul & Silas were upsetting the world. It goes on to define what it was that was upsetting the Jewish & Roman “world.” It doesn’t say they were speaking against Caesar; it says they were “acting contrary to the decrees of Caesar” that is considered breaking the law. In a day when simply speaking against Caesar could get one in serious trouble, they were actually living a life that was in disregard of Caesar and his leadership.

I can understand why that may be upsetting the Romans, but why were the Jews upset about this? We know they were under Roman oppression, right? What is actually happening here? The Jews had no love for the Romans, yet when some of their own Jewish brothers stood up against the Roman authority, the rest of the Jews appeared to have sided with the Romans? That’s seems crazy to me. What was actually happening there?

I think we can get a better picture of what was taking place if we consider the rest of the sentence, they (Paul & Silas) “were saying that there is another King, Yahshua!”
Once again I can see the problems the Romans would have with this; the question to be asked is why the “Roman oppressed Jews” are having a problem with Paul & Silas proclaiming Yahshua a “Jew” as King?

All of Christ’s life (His testimony) fulfilled all the prophetic evidence from the Old Testament concerning the Messiyah, and fulfilled the law yet they did not recognize these things. At the same time the Jews were not agreeing that one of their own was the King as Paul & Silas were proclaiming in the face of serious retribution. Disregarding Christ as King of kings is deception and rebellion in the strongest sense.

We know the Jews did not receive their Messiyah they rejected Him. However those who believed in Him are noted as “acting in a way that was contrary” to the powers that be of their day when the ways of man and mans government were in conflict with the ways of God! Go ahead and try to find a people today who will stand for Christ in the face of governmental pressure. I am not referring to a group of misguided people who “think or say” that they are Christian only to have their very lives betray that proclamation. I am talking about a family that lives in a tight knit community spreading forth the life of Christ as they went/go by virtue of how they live, difficult to find wouldn’t you say? More on this in subsequent parts.

While I would agree that the “church” is culturally relevant today, they can never make Yahshua more culturally relevant, ever, they simply do not have that kind of power, no one does. Do you see the “church” in any flavor turning out people like Paul & Silas who turn their world upside down by the way they live? And how’s that you might ask? By living a life the supports their verbal claims that the federal government or some ruling king is not king, but rather Christ is King and then live out a loyalty to Christ Yahshua that may bring death as a result?

When you do find a people who live like Paul & Silas, and they are here, you will see that the “religious church” is attacking them for their message just like the “religious Jews” attacked them. The “church” in any flavor has no clue as to why, where and how Christ is building the ecclesia that they think “they” are. You will never see the “church” stand against the kings of the earth like Paul and Silas did, and with the same effect “upsetting the world” the “church” is nothing more than a religious form of the kings of the earth today.

In the next part we will go on to what the purpose of the “ecclesia” is in this the age of the Holy Spirit and grace.

Terry Jones, the controversial Florida pastor who organized a Quran burning to coincide with the anniversary of the 9/11 attacks Saturday, appears ready to call off the event—maybe. Despite a chorus of opposition from fellow Christians, Jones apparently was waiting from another voice on high—a call from Washington.

Earlier this week Jones told reporters he might call off his Dove World Outreach Center’s “International Burn a Quran Day” event if he received a personal appeal from either the White House or the Pentagon. Secretary of Defense Robert Gates obliged on Thursday, phoning the 58-year-old pastor in Gainesville, where he runs the small church on a 20-acre compound. Gates appealed to Jones over security concerns.

Hours later, Jones said he would cancel the event, but appeared to renege in TV appearances on Friday morning news shows, saying he would not go ahead with the burning if he can meet Saturday with the New York imam planning to build a mosque at Ground Zero.

According to The Washington Post, that New York Imam, Feisal Abdul Rauf, and his partner in the project, Manhattan real estate developer Sharif el-Gamal, said that they had made no deal to stop their plans and had not, in fact, spoken to Jones or with Muhammad Musri, a Florida imam working with Jones to reach a deal to end the Quran-burning event.

President Barack Obama increased Jones’ newsmaker status earlier this week when he condemned the Quran burning as a “recruitment bonanza for al-Qaeda.” Friday, in a nationally televised news conference, ABC’s Jake Tapper asked the president whether he was concerned that he was elevating a fringe figure by addressing him.

Obama responded: “The idea that we would burn the sacred texts of someone else’s religion is contrary to what this country stands for. It’s contrary to what this nation was founded on. My hope is that this individual prays on it and refrains from doing it. But I’m also commander in chief. And we are seeing today riots in Kabul, riots in Afghanistan that threaten our young men and women in uniform. So we have an obligation to send the message that this kind of behavior and threat of action put our men and women in harm’s way.”

Washington’s concern about Jones’ activities stems from that straightforward security threat. Earlier this week, Gen. David Petraeus, the U.S. commander in Afghanistan, took the unusual step of condemning the event publicly. He also phoned Afghan President Hamid Karzai to discuss potential fallout. In the past, reports of a U.S. soldier burning a Quran (which turned out to be untrue) led to riots and violence. Earlier this week, the State Department ordered a review of embassy security worldwide to ward off Muslim reaction once Jones and his church followers set Qurans on fire.

While religious freedom advocates have accused Muslims of holding their values hostage (if you burn them, we will burn you), Jones too has attempted to hold hostage religious and civic leaders over his planned stunt.

“We only did it because we felt there needed to be an outcry against Islam, because Islam is presenting itself as a religion of peace,” Jones told reporters. Yet Dove World Outreach Center has a history of provocative protests and has posted signs in the past on its property reading, “Islam is of the Devil.” It also joined Westboro Baptist Church, the Kansas congregation headed by Fred Phelps, in controversial protests of homosexuality.

At the same time that Jones appears to be entertaining calls from the nation’s top political and national security leaders, it’s worth noting that longstanding calls for Jones to stop the event from leading Christian organizations have gone unheeded.

In July, the National Association of Evangelicals called for a halt to plans for “International Burn A Quran Day,” saying, “Plans to burn Islam’s holy book on the ninth anniversary of Sept. 11 shows disrespect for Muslims and would only exacerbate tensions in Christian-Muslim relations worldwide.”

Open Doors, a California-based advocacy group for persecuted Christians, also publicly demanded a halt earlier this month. The organization’s president, Carl Moeller, called it “a disaster on two fronts: It violates the command of Jesus to love our neighbor and it would likely cause Christians worldwide to be more vilified and persecuted.”

The British-based group Barnabas Fund, which works in predominantly Muslim countries, also decried the event, as did Bob Blincoe, head of the Muslim outreach group Frontiers. In a blog post on Thursday, Blincoe said he had emailed Jones, telling him, “It’s not too late for you to take counsel from the Christian community and change your mind.”

On Thursday, prominent local Florida pastors also joined the chorus, telling Jones that “pastors and Christian leaders have the opportunity to model civility in the public square and reclaim the purpose and mission of the church.” The pastors told Jones that Americans “have freedom to perform acts with which others disagree or deem despicable, but our citizenship as Christians calls us to a higher standard—one of love and respect for all humanity—which supersedes our ‘rights.’”

The 10 pastors who signed the statement represent some of the state’s largest churches, and its most conservative, including Bob Coy of Calvary Chapel and Tullian Tchividjian of Coral Ridge Presbyterian Church, both in Fort Lauderdale.

But the pastors acknowledged what U.S. political and church leaders already know: That whether or not the burning ceremony in Gainesville goes forward, the damage already is done. “The mere threat of carrying out such an insensitive and uncivil act has already caused considerable damage to the reputation of the Christian church, the Bible, and the teachings of Jesus, as well as to interfaith relations among good people—and to the common good—around the world,” they wrote.

A Jordanian interior ministry source said one of the four injured when a rocket exploded near a five-star hotel in Aqaba, later died from his injuries.

There was no word of casualties in the adjacent Israeli port and holiday resort of Eilat, police said. Aqaba and Eilat lie on the narrow northern end of the Gulf of Aqaba, an extension of the Red Sea, with Sinai stretching west and south of Eilat.

Jordanian Minister of State Ali al-Ayed said the kingdom would continue its “fight against terrorists who undertake callous attacks that targets innocent people.”

Israeli President Shimon Peres condemned the rocket fire and said Israel and Jordan, who made peace in 1994, were “partners in the uncompromising struggle to eradicate terrorism.”

“There is a real struggle in the Middle East between the peace camp of moderate countries and the camp of extremists, who want to sabotage any chance for peace,” Peres said.

Asked where the Aqaba rocket was fired from, the Jordanian source said without elaborating: “It came from the west.” Experts were investigating the site to find out where the short-range rocket had been launched, he said.

Egyptian security sources were quoted by the state news agency as saying rockets could not have been fired from Sinai since the largely empty, desert region was very mountainous.

“The only missiles that can be fired from Sinai are mortars which can pass over these heights,” General Abdel Fadeel Shousha, governor of South Sinai, said adding the area such an operation would require open space.

EXPLOSION BY BEACH

Aqaba resident Ibrahim Salymehin said he heard one loud blast and when he arrived at the scene he saw at least three injured men taken to a nearby hospital by ambulance.

A crowd gathered near the scene of the explosion several hundred meters away from a five-star hotel close to the beach.

“We saw the wreckage of a taxi which was burned, and fragmented metal scattered around the area that was cordoned off by police,” another Aqaba resident, Abdullah Yashin Rawashdehd, told Reuters.

Eilat District Police Commander Moshe Cohen told Israel Radio that his forces were still trying to confirm that five explosions heard in the morning had been caused by shelling.

Two of the suspected rockets or mortar bombs appeared to have landed in the sea, while another hit Aqaba, he said.

“It’s a little early to say, but it is reasonable to assume that it came from the southern area,” he said, referring to neighboring Egypt, whose Sinai Peninsula has suffered occasional violence attributed to Islamist militants.

A police spokesman later said the remains of one rocket was found in Eilat and was being examined by bomb experts.

No group claimed responsibility for the attack.

U.S. State Department spokesman P.J. Crowley said the rocket salvo was a “deplorable action” intended to undermine direct negotiations between Israel and the Palestinians.

Asked if Washington knew who was behind the attacks, Crowley told a news briefing: “There are armed elements here that want to see the conflict continue. They have used these tactics before and we’re not surprised that they are using them again.”

At least one rocket struck Aqaba on April 22, causing no casualties. Amman said the rocket had been fired from outside Jordan and Israeli media said Sinai was a possible launch point.

In 2005, rockets were fired at U.S. warships in Aqaba but missed their target and killed a Jordanian soldier on land. A group claiming links to al Qaeda said it was behind the attack.

Two years later, a Palestinian suicide bomber infiltrated through Sinai and killed three people at a bakery in Eilat, which lies on Israel’s southern tip and has only rarely been touched by the Middle East conflict.

Jordan and Egypt are the only Arab states to have full peace treaties with Israel. Those relations were frayed by Israel’s crackdown a decade ago on a Palestinian uprising in the West Bank and Gaza Strip.

Democracy Marcy – Then again to heck with the Middle East as perhaps the time is now to let the entire region collapse so we can move onto the next phase of ridding the world of evil. William Michael

Over the years many “Great Enlightenment” thinkers have been changed or removed from textbooks. Was this about Thomas Jefferson, or John Calvin? I offer the opinion that this change was about John Calvin, and the hatred that many have towards any type of right centered religion. Yet, as a teacher of American Literature, I would like to point out that the Enlightenment period was about searching out different ways of thought and religious styles and that included, yes, Calvinistic thought. I am pretty positive that the few paragraphs on John Calvin in the new textbook are not going to cause a religious revival. They will, however, provide a different way of thinking, a new enlightened way of thought, for students to agree or disagree with, not to be conformed by.

Thomas Jefferson is my hero. He is my favorite character in history. I hope I never see the day we completely remove this founding father from our children’s textbooks. But, I also hope I never see the day where we stop looking at what is best for our kid’s, in what they are learning from the textbooks they are forced to read.

Andrea Millhouse is a content writer for Online Schools and Online MBA who gives advice on the pursuit of education and living a healthy life. She also is a contributing writer for a site that helps students determine the best online nursing program for them. In her free time she enjoys hanging out with her kids and planning lunch dates with her friends. Andrea loves to read any great book and is hooked on politics. You can find her at a Borders anytime she is not with her kids.

Andrea Millhouse of Online PhD:

The commission probing allegations that the Justice Department wrongly abandoned a case against the New Black Panther Party has formally called for a federal investigation into claims that the department’s Civil Rights Division will not pursue black defendants.

In a letter sent Wednesday to Assistant Attorney General Thomas Perez, the chairman of the bipartisan commission said testimony last week from an ex-Justice official raised “grave questions” about whether the division is “color blind” in its enforcement of the law.

“This testimony raised serious concerns as to whether the Civil Rights Division’s enforcement policies are being pursued in a race-neutral fashion and further calls into question the department’s decision to change course in the New Black Panther Party litigation,” Chairman Gerald Reynolds wrote.

Former Justice attorney J. Christian Adams testified last week before the commission that his former employer not only abandoned the Black Panther voter intimidation case for racial reasons, but had instructed attorneys in the division to ignore cases that involve black defendants and white victims.

Perez told the panel in May to bring any such claims “to our attention” if there’s evidence — Reynolds wrote Wednesday that in light of the testimony, the Justice Department should follow up.

Reynolds also voiced concern about the Justice Department’s “intransigence” in providing witnesses to testify and urged the department to allow former voting section chief Christopher Coates to appear before the panel. Adams repeatedly said last week that Coates’ testimony would be critical to the investigation.

The probe stems from an incident on Election Day in 2008 in Philadelphia, where members of the New Black Panther Party were videotaped in front of a polling place dressed in military-style uniforms and allegedly hurling racial slurs while one brandished a night stick.

The Bush Justice Department brought the first case against three members of the group, accusing them in a civil complaint of violating the Voter Rights Act. The Obama administration initially pursued the case, winning a default judgment in federal court in April 2009 when the Black Panther members did not appear in court. But then the administration moved to dismiss the charges the following month after getting one of the New Black Panther members to agree to not carry a “deadly weapon” near a polling place until 2012.

Malik Zulu Shabazz, chairman of the party, told Fox News last week that the actions caught on video “were outside of organizational policy” and that the party does not “condone” the behavior. But he said the issue was being “overblown.”

The Justice Department said in a statement last week that the Civil Rights Division determined “the facts and the law did not support pursuing claims” against the two other defendants and denied Adams’ allegations.

Democracy March Editor’s Notes -

Perhaps it’s time to create new solutions as the solutions of the recent past are not working.  At some point when an individual, family, or business realize there is no longer any money nor is their the ability to obtain credit that it is perhaps wise to file for bankruptcy.  At some point we need to stop spending, stop relying on the federal government and bring back the power to the local economy.

This is an interesting article.  What do you think?

By Emily Kaiser

WASHINGTON | Sun Jul 11, 2010 3:03pm EDT

WASHINGTON (Reuters) – The U.S. Federal Reserve’s list of worries may be getting longer.

A fading recovery, persistently high unemployment, Europe’s debt troubles and commercial real estate losses have garnered most of the attention. But some Fed officials have begun talking more about another trouble zone — recession-hit U.S. state and local government finances.

The problem is that they have to balance their budgets, unlike the federal government, which is running a deficit equal to more than 10 percent of total economic output.

“They have no choice but to cut spending or raise taxes — or they get some more help from Washington,” said Harm Bandholz, an economist with Unicredit in New York.

He thinks state and local government finances represent the most important domestic risk factor in the U.S. economy. Yet they received only two brief mentions in 19 pages of minutes from the Fed’s April policy-setting meeting.

Minutes from the Fed’s last meeting, on June 22-23, set for release on Wednesday, are likely to show the central bank trimmed its economic growth forecast, largely because of a run of disappointing data and fears of a European slowdown.

Bandholz said the Fed may be reluctant to say much more about state and local government budgets because that would involve treading into the realm of fiscal policy, which is the Treasury Department’s responsibility.

But they may draw more attention as the problem gets worse. Next year’s state and local government budget gap is expected to reach $140 billion, or a little more than 1 percent of gross domestic product. Considering economists expect GDP growth of only about 3 percent next year, that is a substantial hit.

In the first quarter of 2010, the most recent period for which full data is available, state and local governments subtracted 0.5 percentage point from gross domestic product. That was equal to the reduction from commercial real estate, a primary area of concern for the Fed.

(For a graphic on the GDP drag, see link.reuters.com/jyj76m)

The Fed may get more evidence this week that the economy stumbled into the summer. Economists are predicting weak U.S. June retail sales and a small decline in industrial output.

Also on this week’s agenda is a batch of Chinese statistics, including second-quarter GDP, which is forecast to slow to a still-hot 10.5 percent from 11.9 percent.

GETTING WORSE

Government budget cuts weigh on economic growth because they can lead to job losses and spending reductions, as well as higher taxes that constrain consumer and business spending. In the first quarter, state and local governments reduced spending at a 3.9 percent rate, the steepest drop since 1981.

“This situation is our nation’s very immediate analog of the public finance pressures being felt in Europe,” Dennis Lockhart, president of the Atlanta Fed, said in a June 30 speech, one of a smattering of recent Fed references to state and local government budgets.

It is likely to become a bigger drag over the next 18 months. As part of last year’s $863 billion stimulus package, the federal government gave money to help close state and local budget gaps. But the transfer payments peaked in the second quarter of last year and are running out.

This is evident in the GDP figures. In the second quarter of last year, when stimulus money flowed in, state and local governments added a half-point to U.S. economic output.

Second-quarter 2010 GDP figures won’t be released until the end of July, but judging from the 34,000 jobs state and local governments cut over that period, it appears this segment once again subtracted from overall growth.

The Fed seems to be watching.

The Federal Reserve Bank of San Francisco published a research paper on “fiscal crises of the states” in late June, less than a week after the Fed’s last policy meeting. (here)

In the paper, Fed researchers said both the central bank and private economists had factored the budget squeeze into their forecasts and considered it a “modest drag on growth.” But they showed little concern that this would be enough to derail the shaky economic recovery.

“Historically, the health of the national economy determines the health of state finances, not the other way around,” they wrote.

Some economists see a more serious problem. Paul Kasriel, chief economist at Northern Trust in Chicago, lowered his economic growth forecast for the rest of this year, in part because of the worsening condition of state and local budgets.

Goldman Sachs’s Jan Hatzius said his 2011 economic growth forecast may be in jeopardy if states receive no more fiscal assistance from Washington.

“The point is that a tightening of the overall fiscal stance at a time when the economy is already struggling … is a bad idea,” he said.