In his column in Forbes magazine, Roubini, a professor of economics at the Stern School of Business at New York University and chairman of Roubini Global Economics, a consulting firm, notes that the president’s “waning political capital” will stand in the way of achieving the left’s fiscal, social and economic goals.
The administration has proposed a new budget, as well as a tax on banks, and is actively marketing the ideas, but these proposals fall short of the required “aggressive fiscal reforms” to make America competitive again, writes Roubini.
“The fiscal deficit is likely to remain near $1 trillion and exceed 5 percent of GDP over the next decade and trend higher thereafter,” writes Roubini.
“Near-term spending on fiscal stimulus and defense will remain high at least until 2011, as Obama's proposed three-year freeze on discretionary spending excludes defense and entitlements.”
What is more, the sluggish and jobless economic recovery and “weaknesses in the financial and household sectors” will keep federal revenues down, adds Roubini.
Given this “ticking fiscal bomb,” as well as midterm and presidential elections in November 2010 and 2012, the necessary reforms will not be undertaken, adds the economist.
http://moneynews.com/StreetTalk/Roubini-U-S--Ticking-Fiscal/2010/02/05/id/349118
