Stiglitz says that the British deficit reduction plan will be a disaster

[eridani]

http://www.independent.co.uk/news/uk/politics/osbornes-first-budget-its-wrong-wrong-wrong-2011501.html

George Osborne will probably not be very bothered that there is a man who thinks he got last week's emergency Budget almost entirely wrong. But he should be. Because that man is a former chief economist at the World Bank who won the Nobel Prize for Economics for his work on why markets do not produce the outcomes which, in theory, they ought to.


Professor Joseph Stiglitz, who has been described as the biggest brain in economics, is distinctly unimpressed by George Osborne's strategy. This, he predicts, will make Britain's recovery from recession longer, slower and harder than it needs to be. The rise in VAT could even tip us into a double-dip recession.

Stiglitz, who was once Bill Clinton's senior economic adviser, is now professor of economics and finance at Columbia Business School. He was in the UK this week at the University of Manchester, where he chairs the Brooks World Poverty Institute, but he lifted his head from the detail of international development to scrutinise the economic strategy of the Conservative Chancellor whose Liberal Democrat partners recently reversed their judgement that massive public spending cuts now would endanger the economy and joined in the Tory slash-and-burn strategy. They were deeply wrong to do so, he believes.

It would be a mistake to ignore Stig-litz on this. He has a track record of getting his predictions right. He was one of the few economists who predicted the global financial meltdown long before it occurred.

"What happened was very much in accord with what I expected," he tells me when we meet for a coffee outside the Blackwell bookshop in the centre of the university. "The data was pretty clear about that." And the scale of the crash? "That wasn't a surprise," he adds, in a matter-of-fact manner. "The bigger the bubble, the bigger the burst.

[aquart]

1. A six-year-old could tell you the VAT increase was insane.

Really doesn't take a Nobel to notice that one.

[dipsydoodle]

3. What if that was the trade off

against reductions in the NHS. I mean - you've got socialised medicine I guess so which would you have chosen ?

Aside from that here are the VAT rates in other European countries : http://en.wikipedia.org/wiki/Tax_rates_of_Europe

[aquart]

6. A completely regressive tax is your answer? It ain't mine.

That's not a choice, it's a robbery.

[dipsydoodle]

7. Oh

.

[Selatius]

2. Obama lost a big opportunity by not putting Joseph Stiglitz on his economic team.

Instead, he puts crooked guys like Lawrence Summers for the National Economic Council and Timothy Geithner in charge of the Treasury. It was a mistake. I don't understand why he did this.

[Skittles]

4. it was no mistake

Obama got who he wanted

[amandabeech]

8. Obama's campaign contributors got what they wanted. n/t

[Hawkowl]

5. Great Depression redux

It is simply astonishing to me the way history is repeating itself with our "brilliant" leaders at the helm. Flabbergasted.