Stiglitz: The U.S. Will Crash Again Unless We Pass Even More Stimulus

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Once again, the U.S. economy faces disaster should we not enact more stimulus. Joseph Stiglitz has warned that the U.S. economy could contract again in the second half of 2010 without additional government stimulus.

Canadian Press: “The likelihood of this slowdown is very, very high,” Stiglitz told reporters in Singapore. “There is a significant chance that the number will be in the negative range.” Stiglitz, a professor at Columbia University, called on Washington to make more funds available to state governments who face a drop in tax revenue. The U.S. economy, the world’s largest, must grow at least 3 per cent to create enough jobs for new entrants into the labour force, he said.

“If you don’t prepare now, and the economy turns out to be as weak as I think it’s likely to be, then you’ll be in a very difficult position,” he said.

Thing is, at the very least, shouldn’t we first wait until the majority of current stimulus is spent? The U.S. has barely done 30% so far. The rallying dollar probably doesn’t expect much influence from Mr. Stiglitz next year.

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