UP Ibalon Bicol: Dr. Doom thinks the worse is yet to come

Dr. Doom thinks the worse is yet to come

11/19/2009 | Posted by mesiamd | Edit Post

In an article written for the Daily News, Nouriel Roubini, better known as Dr. Doom predicted that unemployment would be worse next year. From the official jobless rate of 10.2% the NYU economics professor who foresaw the economic meltdown spoke grimly of greater loss of work ---probably now hovering at 17.5% if those who stopped looking for jobs or remained underemployed were included.

“The long-term picture for workers and families is even worse than current job loss numbers alone would suggest. Now as a way of sharing the pain, many firms are telling their workers to cut hours, take furloughs and accept lower wages. Specifically, that fall in hours worked is equivalent to another 3 million full time jobs lost on top of the 7.5 million jobs formally lost.

This is very bad news but we must face facts. Many of the lost jobs are gone forever, including construction jobs, finance jobs and manufacturing jobs. Recent studies suggest that a quarter of U.S. jobs are fully out-sourceable over time to other countries.”----Daily News (11/15/09, Roubini, N.)

Roubini suggested that in the coming year the unemployment rate will hover high at about 11%, but it will be far worse in the following two years. Because of a weak labor market, he says the economic growth and recovery will be slow.

The budget deficits will rise accompanied by slowing in the real estate market. Delinquencies on mortgage payments, larger budget deficits and a fall of real estate prices are expected. If these scenarios occur, banks and lending institutions will bear much of the pain.

Roubini’s prescription is for the government to embark on another stimulus---creation of jobs by investing on infrastructure. Giving away unemployment checks is not enough. Those without work must find a way to have one and be productive.

Judging from the falling popularity of Obama, there is doubt if the US president can steer the country to better economic times. As he rounds up his visit to Beijing, China, Obama speaks of a double-dip recession if debt and spending are not controlled. =0=

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Labels: budget deficit, Dr. Doom, economy, joblessness, jobs, Nouriel Roubini, prediction, recession, recovery, Totie Mesia, US debt

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Dr. Doom thinks the worse is yet to come

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