Friday, October 15, 2010

Nouriel Roubini on jobs creation and economic Growth

Nouriel Roubini : "....If you don’t create jobs there is no labour increment, there is no consumption growth and the risk of a double dip becomes worse. Paradoxically in the last few quarters there has been a switch of distribution of income from labour to capital and to profits and these profits are not being reinvested and firms are not hiring workers. What can we do is difficult, we are in a process of deleveraging which is going to occur for a while. What can we do?—I would try to subsidise the demand for labour. I think instead of having an investment tax credit that boosts even more capex spending, this capital intensive, I would do a temporary cut in the payroll tax for two years. If you want to increase demand for labour rather than demand for capital, I would do a payroll tax rather than investment tax like Obama has suggested. So that would be something that reduces their labour cost for the producers."

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