Nobel laureate economist Joseph Stiglitz says the government should ratchet up spending and cut taxes to fight joblessness.
“There is, in economics, something akin to the Powell doctrine in the military: one needs to attack the problem with overwhelming force,” the Columbia University professor said in testimony to Congress.
He was referring to Colin Powell, former chairman of the Joint Chiefs of Staff.
“As we approach the looming jobs problem, we should not repeat the mistakes we have continually made in responding to this crisis: too little, too late,” Stiglitz said.
The slight decline in the unemployment rate – to 10 percent in November – is merely an aberration, he said. Growth in private demand will probably be “insufficient to restore employment to normal levels any time soon.”
President Obama recently proposed a series of new tax breaks and spending programs to boost job creation. Stiglitz didn’t directly address Obama’s plan.
But he did say, “Unless action is taken, we risk facing a vicious cycle: unemployment contributing to a weak economy, more mortgage foreclosures, more bad debts, lower demand, and possibly more, but certainly not less, unemployment.”
Harvard economist Ken Rogoff also is concerned about the jobs picture.
“It's hard to see the kind of robust recovery that's really going to generate the 10, 11 million jobs that we need to get back to where we were before it started," he told Yahoo’s Tech Ticker.
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