Joseph Stiglitz it winner of the Nobel Prize for Economics places blame for the recession the U.S. is now facing on the "mess" left by Alan Greenspan and on the irresponsible Bush Tax Cuts.
Greenspan `Mess' Risks U.S. Recession, Stiglitz Says
``I'm very pessimistic,'' Stiglitz said in an interview in London today. ``Alan Greenspan really made a mess of all this. He pushed out too much liquidity at the wrong time. He supported the tax cut in 2001, which is the beginning of these problems. He encouraged people to take out variable-rate mortgages.''
Stiglitz said there is a 50 percent chance of a recession in the U.S. and that growth will certainly slow to less than half of its 3 percent potential. A worldwide jump in credit costs following the collapse of the subprime mortgage market is choking off finance to American consumers.
Now the economic quacks of the G.O.P are prescribing that we make the Bush tax cuts that are the root cause of this recession, permanent, locking the U.S. into a downward trajectory toward economic calamity.
Joseph Stiglitz lays blame squarely on rhe rigidly doctrinare economic policies of the Bush Administration and the Far Right Wing of the Republican Party.
Faulting Bush
He also faulted President George W. Bush for cutting taxes in 2001, widening the government's budget deficit and allowing political support for free-market trading to wane.
``The richest country in the world cannot live within its means,'' Stiglitz said. ``It's a real example of macro economic mismanagement. The working out of this global imbalance will cause global problems. The depth of the conviction on free markets in the United States is not very great. We have increased those subsidies, doubled them, under President Bush.''
Lowering interest rates now will help the U.S. economy ``a little bit, not very much,'' Stiglitz said, adding that easing terms on mortgage loans would be like ``kicking the problem further down the road.''
As 2008 starts we are confronted by recession AND stagflation. Americans need to be absolutely clear about exactly who created this predicament.