Nouriel Roubini, Dr. Death, says the U.S. is still really, really sick
An excerpt of a Huffington Post article by Eric Margolis
Noted economist Nouriel Roubini, who predicted the American crash of 2008 and nick-named “Dr. Death” by the media, warns of grim economic times ahead: deflation; rising unemployment; increased taxes; overcapacity; and negative growth.
According to Roubini, for the US, the second half of 2010 will be worse than the first. The United States, 25% of the global economy, can’t rein in its spending or cut debt. President George Bush inherited a surplus and went on to create the biggest deficit in US history. Now, President Barack Obama is making matters worse by piling on more unsustainable debt.
Government stimulus efforts were a “waste of money” says Roubini. The only way to escape this debt trap is to make economies more productive and shrink governments. But slashing government spending will depress debt-addicted economies in the short-medium term, making matters worse. Dangerous inflation lies ahead in the long term.
And alarmingly for resource exporters like Canada and Australia, Roubini warns China has massively overspent on infrastructure, exporting its excess capacity. Beijing has “front-loaded 15 years of capital spending,” says Roubini. China has massive over-capacity in industry, producing a huge, dangerous bubble. China’s property market is another giant bubble. When they pop, the globe will tremble.