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 President Bill Clinton’s Council of Economic Advisers from 1995 to 1997.
In contrast, President Barack Obama “recognizes the need to stimulate the economy,” Stiglitz said.
Romney has made a handful of promises about what he would do on day one of his presidency. He's promised to approve the Keystone pipeline that President Obama stopped, cut taxes and change the tax code, begin the process to end Obama's health care law, lower the deficit, tell China to trade fairly, and remove regulations he says hamper job growth.
But some questions remain — like, how feasible is it that Romney would be able to get everything he wants passed by Congress? Would the Tea Party stand up for its causes early on, and would Democrats work with him? And what can Romney actually do to create jobs, as he's promised?
Beyond that, Romney would still probably face a high unemployment rate, and, like Obama, would have to fight parts of his own party no matter what path he chooses to spur the economy. Fresh off a primary in which he made promises to the far right on cutting spending, ending Obamacare and erasing taxes, the practical path for Romney the Job Creator isn't crystal clear.
And still reeling slightly from a primary in which all of their ad hoc heroes fell by either their own doing or a barrage of super PAC ads, right-wing Republicans are hoping that Romney stands by the promises he made to win their votes.
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 President Bill Clinton’s Council of Economic Advisers from 1995 to 1997.
In contrast, President Barack Obama “recognizes the need to stimulate the economy,” Stiglitz said.
Romney has made a handful of promises about what he would do on day one of his presidency. He's promised to approve the Keystone pipeline that President Obama stopped, cut taxes and change the tax code, begin the process to end Obama's health care law, lower the deficit, tell China to trade fairly, and remove regulations he says hamper job growth.
But some questions remain — like, how feasible is it that Romney would be able to get everything he wants passed by Congress? Would the Tea Party stand up for its causes early on, and would Democrats work with him? And what can Romney actually do to create jobs, as he's promised?
Beyond that, Romney would still probably face a high unemployment rate, and, like Obama, would have to fight parts of his own party no matter what path he chooses to spur the economy. Fresh off a primary in which he made promises to the far right on cutting spending, ending Obamacare and erasing taxes, the practical path for Romney the Job Creator isn't crystal clear.
And still reeling slightly from a primary in which all of their ad hoc heroes fell by either their own doing or a barrage of super PAC ads, right-wing Republicans are hoping that Romney stands by the promises he made to win their votes.
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