Federal Reserve Governor Edward Gramlich was in Milwaukee Wednesday giving a speech to local business leaders.

In response to audience questions about federal budget deficits, Gramlich said the United States cannot grow its way out of the problem. He also addressed Social Security by saying that private accounts don't address the solvency issue, and that Medicare is a much bigger problem that should be taken care of first.

"Individual accounts may or may not be a good idea, but they won't solve the basic actuarial problem" facing Social Security, Gramlich said.

Moreover, "the stock market can be an uncertain mistress," he said, in reference to the level of share prices when retirees actually tap into their accounts.

Gramlich said he was "worried on the fiscal side" and said the country should work to balance the federal budget outside of Social Security.

"Over time, on average, we should try to get the non-Social Security part of our budget in balance," he said.