The current economy is a “write-off,” according to Kenneth Rogoff, a Harvard University economics professor.
He did not put much hope in the economy turning around soon, the Houston Chronicle reported. “2009 is basically a write-off,” said Rogoff.
Rogoff did point out one positive, however. “All economic crises end,” he said.
Rogoff said the United States has to change its philosophy of borrowing two-thirds of the world’s savings annually. He said ignoring the debt was “utterly delusional.”
“2009 is a lost cause. We’re working on 2010 here, but if they don’t do anything in the next couple of months, 2010 is going to be a lost cause, too.”
Nouriel Roubini, an economist with New York University’s Stern School of Business who has been dubbed “Dr. Doom,” said the government’s stimulus package will be pricey.
“It’s not a free lunch. We have to finance it. Let’s not kid each other,” he said. “We need a stimulus, but the cost of it will be massive down the line.”
Roubini is predicting a long recovery and believes the economy will see an “L-shaped stagnation” like Japan’s recession in the 1990s.
Nariman Behravesh, chief economist for Global Insight, sees a brighter outlook for the near term. He said the economy could rebound by 2010 and estimated that crude oil will be trading at $50 or $60 a barrel.
“This is the Great Recession. It is not the Great Depression 2.0, and it is not Japan’s lost decade,” he said.
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