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With GOP-Controlled Congress, Roubini Predicts US "Fiscal Train Wreck"
US on Track for "Fiscal Train Wreck": Roubini
The
U.S. economy is a "fiscal train wreck" waiting to happen that risks
ushering in a period of stagnation featuring by minimal growth, high
unemployment and deflationary pressure, U.S. economist Nouriel Roubini
wrote on Friday.
In a commentary for the
Financial Times, Roubini -- one of the first economists to predict the
housing crash in the United States and known as 'Dr Doom' for his
pessimistic forecasts -- said fiscal and monetary stimulus had prevented
another depression. He
said the U.S. remains on an "unsustainable fiscal course" and the likely
make-up of Congress after elections next Tuesday, in which the
Republicans look set for strong gains, virtually takes fiscal reform off
the agenda. "The risk ... is that
something on the fiscal side will snap ... The trigger could be a debt
rollover crisis in a major U.S. state government," he wrote. "The
worst of the coming fiscal train wreck will be prevented by the Fed's
easing. But the risk is (Obama) ... will then preside over ... a Japanese style stagnation, where growth is barely positive, and deflationary pressures and high unemployment linger." (Reporting by John Stonestreet; editing by Patrick Graham)
Nouriel Roubini, Professor of Economics at New York University and Chairman of Roubini Global Economics. In his piece for the Financial Times Roubini warned that the Obama admin. would have difficulty working with an "unco-operative Republican party trapped in a belief in voodoo economics, the economic equivalent of creationism." (Credit: Reuters/Mike Segar)
But he said
that further quantitative easing likely to be announced by the Federal
Reserve next Wednesday will have little effect on U.S. growth in 2011,
"so fiscal policy should be doing some of the lifting to prevent a
double dip recession," he said.
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25 Comments so far
Show AllResponsibility for the coming 'train wreck' falls directly on the shoulders of Obama and the Democratic Party. He will do much better under a Republican Congress as he can complain bitterly about an 'obstructionist GOP Congress'. His rhetoric will shine. The working people of the US will continue to suffer under either corporate party. This financial crisis could have been mitigated in a flash by correct fiscal policies whose design was to serve the people rather than the Polyphemus Financial Class.
Give me a break. Hopefully the Repubs will take the house and maybe even the senate and then see what the next two years brings.
Give me a break. It is time for people like you to start taking "Responsibility" for the train wreck that is coming. Its you and your crony wall streeters and corporatists that are in charge and have been for a long while. Hopefully the Repubs will take the house and maybe even the senate and then see what the next two years brings.
It is not the sole fault of the Dimocrats, nor that of the Rethuglicans. It is 100% the fault of both wings of the Corporate Party, both Democrat and Republican. The Rethugs may be a lot more obvious about being corporate whores, but the Dims' are bent over just as far and do just as much of their corporate masters' bidding as the Rethugs, admittedly with a nicer and more pleasant rhetorical spin and veneer on their surface. The Dem good cop vs. Rethug bad cop routine continues to work its charm on the sheeple of America, who continue to choose the lesser of two evils every two and four years, then blink in astonishment and confusion as to why things just keep getting worse, regardless of which "party" is in power.
Hmmm....could it be that maybe - just maybe - the Dems and Rethugs are on the same corporate team, and not the average Americans'??
No! I will not believe that! Vote Dem! Vote Dem! Better than the Rethugs anyway!! God Bless America!!!
"When fascism comes to America, it will be wrapped in the flag, carrying a cross."
And it's even worse at the state and local level.
Maybe government officials at all levels need to borrow some pages from Ayn Rands "Atlas Shrugged" and, like John Galt's capitalist boss's strike, they hold a public service strike. No road and bridge maintenance including snow removal, no schools, no police, no fire or emergency response, no public transit, no airport operations or air traffic control; no environmental, health or or workplace safety regulatory enforcement. In many places, no water or electricity either.
They won't have to strike to get those results. The way public service workers are being laid off, the jobs will not get done.
In my opinion bosses are pretty useless. Many could disappear and work would still get done. There are so many layers of bosses and useless suits, workers would probably benefit from it. The answer to layoffs is occupation and expropriation. This has to happen on a mass scale a la a general strike else it fails.
Obama may currently be responsible for any economic melt down, but only because he is yielding to pressure from his Republican advisors and the Voodoo economics of the Republican party and in particular the irresponsible greedy and fraudulent policies that were instigated under the Bush administration. Corporate money and power rule over both parties, but the Republican party is mostly to blame and has been since Ronald Regan ignorantly yielded to trickle-down economics.
If the Democrats at large (with few exceptions) hadn't spent so many years bending over backwards for and going lockstep with the GOP in pretty much everything, including and particularly our illegal and wrongheaded wars abroad, we would not be in the situation right now. We wouldn't ended up with the likes of Ronald Reagan, Carter, the Bushes, Clinton, or Obama in office. Nor would the "Tea Baggers" be as relevent and carry as much weight as they do, if they'd risen at all.
Who is the "you" whom you are criticising - the economist Roubini? As a progressive Keynsian economist in a university somewhere, he hardly has control over what the wall street thugs are doing. Arent you shooting the messenger?
Roubini sez: The U.S. economy ... risks ushering in a period of stagnation featuring by minimal growth, high unemployment and deflationary pressure ...
***
Dang. Knew I should have spent more time studying economics back in school.
Then I might understand how this forecast differs from the present day.
do not participate in "who's to blame, dem vs. gop" rubbish again, folks.
prepare yourselves and others for the train wreck that's coming fast.
try not to end up being the casualties of the train wreck.
you can't say no one foresaw it or warned you.
Let's see: A costly war in Afghanistan, another costly war in Iraq, a huge deficit creating tax cut mostly for the Rich that the current Republicans want to hang on to, banks gone wild and huge bailouts to them? All of this happened under 8 years of Republican Bush's watch and this was the huge pile of shit that Obama inherited.
With an obstructionist Republican side of Congress - he's been unable to do much about it.
So they retake Congress now, and maybe the White House in two years? An improvement? Nope - it will be more piles of shit.
Roubini is correct. As usual.
Sorry, but I think you are mistaken. It DID happen under the thugs rule, but the Dems did not try to stop a damn thing. They didn't shut down congress or fillibuster or hold up a damn thing. Plus most of them voted FOR and continue to fund the illegal wars. The bills that were passed were allowed to be watered down to be almost worthless. You can blame the blue dogs if you want but who put them in charge of those commitees? Reid and Pelosi. Why let Baucus stall out the HCR bill for so long? Why did Obama make back room deals with PHARMA and the insurance companies before congress even started working on the bills? Why waste a whole year on that POS HCR bill while millions lost their jobs and homes? Why did the dems let the thugs go on their death panel scare tactic all summer without the dems or Obummer coming out strongly to refute it? Why did the Deceptor in Chief break his promise that he wouldn't sign a bill W/ O a PO option in it? Where is an agressive WPA program to get people back to work? The finacial reform bill is toothless. Glass Steagal should have been tried to be put in the bill. Oilbomber let BP run the gulf cleanup and dump toxic shit over people, land and water supplies? Already people have died and thousands more will either die or have their health and lives ruined. After the POS in Chief decided to lift the ban on offshore drilling because he said it was safe. Why is he allowing his people to say the oil is gone, the seafood and water is safe?
Why is helping to funf Columbia's and Mexico's drug wars? And allowing Isreal to continue their crimes against humanity to the people of Gaza. Or let them off murdering 9 people? Because he is just a puppet that let's people pull off their cries?
Why has Obomber covered up Bush's war crimes and continue to redition people or put them in the Bagram hell hole that is worse than Abu Gump? Why is he bombing the hell out of Pakistan without a declaration of war? Why is he continuing to employ XE and other contractors that have been proven to rip us off by over billing, eleclocuting soldiers in showers and kill people with their toxic burn pits?
Why is he letting soldiers get away with PROVEN slaughter of innocent civilians?
I could go on all nite about the dems and the Disappointer in Chief but why bother?
Both parties and obama are complicite in the raping of Americans. There is no difference between the parties. And one more thing. Not stopping the foreclosure scam that has thrown millions out of their houses, even ones that have been paid for, because a FEW bad people might get thru. And lets not start on DADT and State Secrets BS.
Submitted respectably.
Let's remember at this point what another Keynesian economist said a few years ago...
"To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."
Paul Krugman
August 2, 2002
http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html
The big corporatist government shills and the Fed are the ones who got us in this mess. I bet Roubini secretly thinks more bailouts are a good idea too just like Krugman did.
Sorry, the train wreck already happened when GW drove the damn thing off the cliff. Now we're just stumbling about in the wreckage and mumbling "WTF happened."
for sure, many of us are still in the process of tumbling down to the bottom at which many have already arrived.
The train wreck started long before GW Bush took the economy over the cliff. This has its roots In Capitalism itself as currently structured and in the USA relying on the "Permanent Warfare State" to keep its economy growing.
With the US dollar as reserve currency and with the MIC generating "Conflicts" in order to generate "wealth" this day of reckoning was inevitable.
All those various laws that were added and removed merely delayed or accelerated the day of reckoning.
The FINAL stage of this terminal illness occurred in the Nixon administration when Nixon turned the US dollar into a purely by Fiat Currency again due to a War the US had involved itself in that was bankrupting the economy.
If the clock could be turned back to "Pre-bush" or "Pre-Clinton" or "Pre-Reagan" or even "Pre-Truman" this issue would still exist. The steps taken by all those Administrations before helped to drive the train off the cliff.
No administration made any serious attempt to shut down the MIC and to develop sustainable economies with equitable wealth distribution. It was all based on borrowing from the future be it economically via debt or ecologically via consumption.
He's writing again, and well worth the read -- meaning Arthur Silber:
http://powerofnarrative.blogspot.com/
Gotta love a lefty libertarian, if only for the irony. But he has even has a few rays of sunshine later on in this short piece -- we don't have to take it personally (and, of course, some people were happy, and made some good art, even during the dark ages).
http://powerofnarrative.blogspot.com/2010/10/sing-it-clowns.html
"
October 29, 2010
"Sing It, Clowns
La commedia e finita. -- the last line of Pagliacci, when everyone is dead, or as good as.
For the moment, that is all that should be said about the historically historic election in history that is almost upon us.
And what is "finished" is not merely the illusion of participatory democracy (you actually believed that shit, dinnit ya? I did too, when I was much stupider), but the United States in anything remotely approaching the form in which you had ever believed it to exist. It's over, done, kaput -- finita, baby.
And not so by the way: this is especially addressed to all those -- on the right, the left, and anywhere else -- who continue to desperately cling to the fantasy that the U.S. might yet be "reformed" or "saved." Part of the genius of "the system" (and this form of genius is hardly restricted to the U.S.; study some history when you're killing time someday) is that it's set up precisely to make "reformation" and "salvation" impossible.
[...]
"
Horace: "Force without judgment will fall of its own weight."
Roubini is smart but he tends to focus exclusively on the markets, the domestic and international banks, hedge funds, currency exchange values and historical numbers crunching. But there are many more factors at work now, several of them historically unprecedented, that will compound the economic and environmental blast radius of the imperial fall and the suffering it will spread throughout the U.S. itself.
The Pentagon is now publicly acknowledging peak oil by moving towards synthetic fuels like the Nazis did when their oil supplies were being shut down by Soviet tanks and U.S. & British air power. Earlier this year "the US joint forces command predicted that global surplus oil production capacity could disappear within two years and there could be a shortfall of nearly 10m barrels A DAY [my caps--metal] by 2015."
[Source: http://www.guardian.co.uk/environment/cif-green/2010/oct/28/oil-us-military-biofuels/print]
It makes one wonder how soon that reality will roll over the troubled U.S, UK and EU domestic economies as well...
In terms of cost effectiveness and sustainability these oil/pipeline/terror wars were clearly never actually thought-through. They've been run slap-dash by successive Rethuglican and Dimocrap maladministrations more as a quarter-assed marketing ploy than a professional military strategy. The "top brass" at the Pentagon have come off looking like identical rubber monkeys in a barrel all willing to sacrifice their own country at the drop of $20 Billion dollars a year-plus for oil for their war machine in exchange for promotion & retirement gigs as lobbyists for a now insanely run amok military-industrial complex.
If the powers-that-be were intelligent enough to have been competent about their own morally fucked up wars they should have gone to a major Draft + full economic mobilization; used the State Department old hands' off-the-shelf occupation plan for Iraq (developed by old WWII and Cold War Dems who remembered how FDR's planners successfully occupied, rebuilt & democratized Japan & Germany) instead of moronically coddling upstart neo-con "shock and awe" plus neo-lib "economic shock therapy" that destroyed Iraq's physical infrastructure, up-ended the regional sectarian balance for decades to come, and wrecked the Iraqi economy to create 5 million refugees destabilizing the economy & politics of the entire region from Central Asia to Yemen.
We're pissing away a $100,000,000,000.00 Billion dollars a year on these botched occupations, special ops plus "drone incursions" with nothing to show for it in terms of reductions of overall terrorist numbers, terrorist attacks or attempted attacks. And we are no closer to SECURING access & price control over Iraqi or Central Asian oil & natural gas than we've ever been. Meanwhile, that imbecile Obomber is signing waivers to let the U.S. fund governments that use child soldiers in places like Sudan (!???), Chad and Yemen.
I hope someone somewhere is keeping a good tally of the incredibly cruel Big Cover-ups of crucial, adverse, America-impacting news like this immanent impact of peak oil on the unaffordable war machine that our political "leaders" and corporate press whores must know about but are deliberately hiding from the Amurkan masses while these elites live the good life, plan their golden parachute escape routes and wait for most of the rest of us to be ground into dust.
Thank you metal, well said. It recently occurred to me after listening to a moderate Republican challenger debate our conservative Blue Dog Congressman (Shuler), both carefully avoiding the subjects of Global Warming, War, economic growth (in the US), and Energy supply/demand issues: we seem to have a tacit agreement in this country with our politicians: they don't address any issues that might make us really uncomfortable or challenge us in any way, and we allow them to avoid dealing with any issue that might challenge the status quo.
The same relationship applies to the media, the churches, educational institutions (most), and of course to every aspect of the economic sphere. For this reason and others, we in the industrialized world are almost completely blind to the fragile and precarious place modern civilization exists in at this moment. Peak Oil and the end of economic growth would be destabilizing enough, but mankind has also been: decimating fish stocks and generally poisoning the seas, rapidly depleting ancient aquifers, filling the atmosphere with GHG's at a rate way beyond the capacity to sequester, depleting essential minerals, depleting the soils, overharvesting trees and directly causing massive rates of species extinctions, and that's just a few off the top of my head. That list doesn't even begin to account for so many of the social, psychological, and physical ills that attend our maladaptive way of life.
Our blissful ignorance of course leads us to completely fail to prepare for rapid, dramatic and accelerating changes in the way we live at a time when we actually have many of the resources (material and economic) to make essential investments in our long-term survival and sustainability. All of this will soon be impossible to deny, necessity will force our hands in so many ways we can't even imagine. And with every passing day we grow more, not less prepared for the changes that are already upon us. Tremendous human suffering could be potentially avoided... But I see few signs for hope in this regard. A better world is still possible, but the intervening days of suffering and chaos will be very hard.
This 'train wreck' has been engineered by the Business Party, both wings, ever since Ronald Reagan. Move your assets offshore and teach your children a foreign language, just in case.
Sorry, Ocean, there's no place to run to and hide. Read what CommonsenseParty wrote about the ecological disasters already barreling down the highway. The European social democracies will do whatever they can to ease the pain of their citizens, which the American fascist govt will never do, but eventually even they will have to give up.
Someone earlier pointed out that the earth wouldn't have been able to support 7 billion human beings even if the climate were not adversely affected. Over-population is as life-threatening as global warming, and neither can be stopped.
Both Republicans and Democrats hope China continues to properly run its economy in order to have the surplus dollars the US needs to borrow to finance our endless wars against Muslims.
It is most gratifying to me to spend a couple of hours listening to all of you learned people who really don't know a damn thing about anything. Still, you have the right to display your ignorance.
And I am particularly gratified to see JoeCool end his tirade with his "Submitted respectably." That is so much "cooler" than respectfully.
You go get 'em Joe!