Economist Nouriel Roubini says that a conflict with Iran over its nuclear program that involves Israel, the United States, or both could drive oil prices to $150 per barrel and lead to a global recession, MSNBC reports.
Unemployment, economic insecurity and growing inequality between rich and poor are already problems in most of the world, Roubini observes, and a major change in policy priorities is needed.
"All these things lead to political and social instability," Roubini says.
"So we have to reduce inequality. We have to give growth to jobs, skills, education, and increase human capital so workers can compete," says Roubini, who teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics, an economic consultancy firm.
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"We have to shift our investment from things that are less productive like the financial sector and housing and real estate to things that are more productive like our people, our human capital, our structure, our technology, our innovation," says Roubini, who anticipated the collapse of the United States housing market and the worldwide recession which started in 2008.
Roubini expects that slow growth in advanced economies will likely lead to "a U-shaped recovery rather than a typical V," a recovery that may continue for another three to five years because of high debt.
"Once you have too much debt in the public and private sector, the painful process could last up to a decade, where economic growth remains weak and anemic and sub-par until we have cleaned up the balance sheet and invested in the things that make us more productive for the future," Roubini says.
Other experts have a similar dire view.
Billionaire financier George Soros says that as the U.S. economy worsens, protests such as those carried out by the Occupy Wall Street movement will turn ugly, breaking down into waves of violent unrest across the nation.
"It will be an excuse for cracking down and using strong-arm tactics to maintain law and order, which, carried to an extreme, could bring about a repressive political system, a society where individual liberty is much more constrained, which would be a break with the tradition of the United States," Soros tells Newsweek.
Unrest in the United States will serve as one of many symptoms of a worsening global economy, which makes wealth preservation a priority over getting rich.
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