Nobel Winner Stiglitz Sees More Recession Odds In Romney
Rich Miller, Bloomberg - Nobel Prize-winning economist Joseph Stiglitz said the election of Mitt Romney as president in November would “significantly” raise the odds of a recession because it would herald a shift to a much tighter budget.
History shows that the adoption of fiscal austerity when an economy is weak can have disastrous consequences, as happened in the U.S. in 1929 on the eve of the Great Depression, Stiglitz told Bloomberg editors and reporters in New York yesterday. Republican candidate Romney risks making that same sort of mistake by backing a plan to slash the budget deficit, he said.
“The Romney plan is going to slow down the economy, worsen the jobs deficit and significantly increase the likelihood of a recession,” said Stiglitz, who served as chairman of PresidentBill Clinton’s Council of Economic Advisers from 1995 to 1997.
In contrast, President Barack Obama “recognizes the need to stimulate the economy,” Stiglitz said.
He listed two other “very big differences” between the Democratic and Republican presidential candidates: Obama sees inequality as a “significant problem” for the country and is committed to raising taxes on the rich to help address it. Romney does not, according to Stiglitz, author of a new book entitled, “The Price of Inequality: How Today’s Divided Society Endangers Our Future.”