Joseph Stiglitz says it’s time to rewire the U.S. economic system: ‘We shouldn’t let a very good disaster go to waste’

U.S. economist Joseph Stiglitz believes now is an effective time to rewire the U.S. economic system, arguing that “we should not let a disaster go to waste.”

The previous senior vice chairman and chief economist of the World Financial institution stated on Thursday that the coronavirus pandemic has highlighted how the financial system is not working, referencing inequality, the local weather disaster and the dearth of resilience of the market economic system.

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

“You may get a two-for-one,” he instructed CNBC’s Steve Sedgwick on the annual Ambrosetti Discussion board on the shores of Lake Como in Italy.

The U.S. ought to, for instance, put money into constructing “inexperienced” infrastructure that creates jobs and helps carry down inequality, Stiglitz stated. “As soon as you set your thoughts to it, you notice that we are able to assault two or three of those issues concurrently,” the 78-year-old stated, including that the U.S. has the labor and the capital.

Stiglitz stated it could be “wholesome” for the U.S. economic system to lift taxes “a bit of bit” to finance “a number of the issues we want for the frequent good.”

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

A profitable economic system is just not outlined simply by tax charges but additionally by different components comparable to infrastructure and analysis and growth efforts, Stiglitz stated.

He stated there is a rising consensus that the U.S. wants to alter outdated legal guidelines which were in place for 125 years and deal with extreme market energy throughout the entire of America. “The focus of market energy has elevated enormously within the final 35 years” he stated.

Overregulation and overtaxing will not see the West lose its aggressive edge to rising powers and China, in line with Stiglitz. “I am really fairly assured that this new agenda will really strengthen us,” he stated.

Competitors makes market economies extra modern, whereas monopolies scale back innovation, Stiglitz stated. “We have seen how the massive giants really squash innovation,” he stated.