According to the editor of International Business Times, NYU Economics Professor Nouriel "Dr. Doom" Roubini said unless there's another round of massive fiscal stimulus or a universal debt restructuring, capitalism will continue to experience a crisis due to a systemic flaw first identified by economist Karl Marx more than a century ago.
"Karl Marx had it right," Roubini said in an interview with wsj.com. "At some point capitalism can self-destroy itself. That's because you can not keep on shifting income from labor to capital without not having an excess capacity and a lack of aggregate demand. We thought that markets work. They are not working. What's individually rational...is a self-destructive process."
Roubini added absent organic, strong GDP growth -- which can increase wages and consumer spending -- what's needed is large fiscal stimulus, agreeing with another high-profile economist, Nobel Prize-winner Paul Krugman, that, in the case of the United States, the $786 billion fiscal stimulus approved by Congress in 2009 was too small to create the aggregate demand necessary to advance the U.S. economic recovery to a self-sustaining expansion.
Without that additional fiscal stimulus, that lack of restructuring has led to "zombie houses, zombie banks, and zombie governments," he said…..
Read more at http://www.ibtimes.com/sections/us/
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