Nouriel Roubini on the 2013 US economy

Famous economist Nouriel Roubini is of the opinion that the US growth will be barely 1.7 per cent in 2013, adding that there is a high probability for the USA going over the fiscal cliff. He also said that if this happens, the 2 sides will be forced to reach an agreement by the market reaction.

When asked about the USA, Nouriel said that in the long term he thinks that the U.S. fundamentals are much stronger than other countries but in the short term he thinks that the country will have another year of anemic economic growth.

 Moreover, Roubini said that he really thinks that there is a housing recovery, adding that despite this, those who are more optimistic on housing recovery will be proven wrong in 2013.

In terms of positiveness, Roubini pointed out a couple of things – a housing recovery, reshoring of manufacturing, revaluation of the shale gas and some job creation and the help of quantitative easing 3. Furthermore, he said that even if the USA avoids the fiscal cliff, a GDP of 1.4 per cent is expected and a 1.25 per cent drag on growth in a barely growing economy.

Roubini has also highlighted some problems and said that tax increases are vetoed by Republicans and entitlement reform is not wanted from the Democrats. Moreover, he talks about issues in the budget for 2013, a potential debt ceiling debate and another one about fiscal consolidation and another one about fundamental tax reform.

When Nouriel Roubini was asked whether he would accept a treasury secretary if President Barack Obama were to offer it, he said that Obama would not call on him. As a whole, Roubini said that he enjoyed being involved in politics for 2 years but not that he is a public intellectual he can provide input to debate.