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Economy‘We shouldn’t let a good crisis go to waste’

‘We shouldn’t let a good crisis go to waste’

U.S. economist Joseph Stiglitz believes now could be a good time to rewire the U.S. economic system, arguing that “we shouldn’t let a crisis go to waste.”

The former senior vice chairman and chief economist of the World Bank mentioned on Thursday that the coronavirus pandemic has highlighted how the financial system is not working, referencing inequality, the local weather crisis and the dearth of resilience of the market economic system.

Stiglitz mentioned he is optimistic that many current issues could be tackled concurrently, since they’re associated.

“You can get a two-for-one,” he informed CNBC’s Steve Sedgwick on the annual Ambrosetti Forum on the shores of Lake Como in Italy.

The U.S. ought to, for instance, spend money on constructing “green” infrastructure that creates jobs and helps carry down inequality, Stiglitz mentioned. “Once you put your mind to it, you realize that we can attack two or three of these problems simultaneously,” the 78-year-old mentioned, including that the U.S. has the labor and the capital.

Stiglitz mentioned it could be “healthy” for the U.S. economic system to elevate taxes “a little bit” to finance “some of the things we need for the common good.”

In July, 130 international locations backed a international minimal company tax fee of 15%, and Stiglitz mentioned that transfer has ended the race to the underside on taxes, highlighting how the U.S. is contemplating a 25% fee.   

A profitable economic system is just not outlined simply by tax charges but in addition by different components similar to infrastructure and analysis and improvement efforts, Stiglitz mentioned.

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He mentioned there’s a rising consensus that the U.S. wants to change outdated legal guidelines which have been in place for 125 years and deal with extreme market energy throughout the entire of America. “The concentration of market power has increased enormously in the last 35 years” he mentioned.

Overregulation and overtaxing will not see the West lose its aggressive edge to rising powers and China, in accordance to Stiglitz. “I’m actually quite confident that this new agenda will actually strengthen us,” he mentioned.

Competition makes market economies extra modern, whereas monopolies cut back innovation, Stiglitz mentioned. “We’ve seen how the big giants actually squash innovation,” he mentioned.


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