Former IMF Chief Economist Kenneth Rogoff says the U.S. economy is in danger of suffering its worst recession since World War II.
“We’re just going into the teeth of this recession,” Rogoff, now a Harvard professor, told Bloomberg TV.
He estimates unemployment will rise well into 2010, to at least 9 or 10 percent, and that housing prices will continue to fall into 2010.
"That means a very deep recession worldwide,” Rogoff says.
“There’s not going to be a Great Depression — that’s hyperbole. But it will possibly be the worst recession since World War II.”
Rogoff notes that even China is taking it on the chin. “It’s remarkable that they’re suffering negative export growth."
“I always thought China was at risk of having a crisis because of its problems with the environment, financial system and social structure,” he explains.
“Now the door is slamming shut on exports, and policy isn’t flexible. Growth won’t be more than 5 to 6 percent now, and there is significant risk of implosion.”
Rogoff isn’t alone in his prognosis for the U.S. economy. “For the household sector, this will be the worst event we've had in the post-World War II period,” JP Morgan Chase economist Bruce Kasman told The Wall Street Journal.
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