Adrian Gore, CEO of Discovery, left, and Prof Nouriel Roubini address a media briefing on Discovery's leadership summit in Sandton yesterday. Picture: MARTIN RHODES

THE US is already in a recession although it will not admit it, says Nouriel Roubini, the New York University professor who predicted the collapse of the US housing market and forecast the 2008 recession that followed.

Speaking at a press conference in Johannesburg yesterday, he said SA's economy - and the rest of the world - would not be insulated from the effects of another global meltdown.

Prof Roubini has been nicknamed "Dr Doom" and "permabear" for his regular, pessimistic forecasts of the world's economies. He is in SA to speak at the Discovery leadership summit, which starts today.

He was typically bleak yesterday, and warned that Greece would do best to default on its debt and leave the euro currency zone following failed rescue plans.

"The recent debt exchange deal Europe offered Greece was a rip-off," he said . "If you take into account the large sweeteners the plan gave to creditors, the true debt relief is close to zero."

Europe's austerity measures would need to be intensified to work through the recession.

"Some countries need to engage in fiscal austerity. We need lower interest rates in Europe. We need to lower the value of the euro. We need more fiscal resources. We need three times as much resources in Italy and Spain," Prof Roubini offered as steps to resolve Europe's crisis.

He did not forecast how long it would take for the world to pull out of another recession.

The International Monetary Fund (IMF) also warned yesterday the US and the euro zone risked being plunged back into recession unless policy makers tackled the problems facing the world's two biggest economic forces.

In its biannual World Economic Outlook , the fund said the global economy was "in a dangerous place" and that its forecast of a slow, bumpy recovery would be jeopardised by a deepening of Europe's sovereign debt crisis or overhasty attempts to rein in the US budget deficit.

The IMF urged Republicans and Democrats in Washington to settle differences: "Deep political differences leave the course of US policy highly uncertain.

"There is a serious risk that hasty fiscal cutbacks will further weaken the outlook without providing the long-term reforms required to reduce debt to more sustainable levels."

Prof Roubini said he believed the global recession would not be averted until a strong, "paternalistic" figure stepped up and negotiated a way forward that did not take national pride into account.

He said he was not averse to state involvement in the economy and held up Singapore - which had state ownership of firms and joint regulation and free markets - as an economy that might be shielded from global shocks.

He urged SA to invest in education and infrastructure spend to boost growth. SA was "in a stronger economic position than many countries ", Prof Roubini said, but it would need to confront its levels of inequality .

Countries around the world were becoming more unequal, which had led to demonstrations in Israel, Germany and the UK.

"There is growing inequality all over the world. We have already seen middle-class unrest in Israel. Germans have smashed fat cats' cars," Prof Roubini said.

He predicted there would be protests as well in the world's largest economy . "As we go into another recession, there will be unrest in the US."

Dan Ariely, a professor of psychology and behavioural economics, who is also speaking at Discovery's summit , said he was very concerned that banking structures had not been overhauled . "A very bad incentive structure caused the Wall Street crisis in 2008," he said.

andersona@bdfm.co.za