Joe won’t be making many friends in Davos with this interview…My added thought would be that although austerity undoubtedly slows growth, global growth was pumped up to such unsustainable levels through credit derivatives and deficit spending, that eventually we have no choice but to lower spending in order to force the behavioral change needed to curb reckless habits and risk-taking. At some point, all financially suicidal choices must come to an end, and the pain that flows is a necessary part of the resetting process and then sustainable recovery. So long as people and corporations can get another loan, or another bail-out, no meaningful evolution happens.
Nobel Prize-winning economist and Columbia University professor Joseph Stiglitz talks about U.S. economic growth, tax policy and the European sovereign-debt crisis. Here is a direct link.