Joseph E. Stiglitz on alternatives to drastic state remedies

In this time of economic crisis, many countries feel forced to resort to drastic austerity measures. But the real answer is entirely different, says Nobel Prize-winning economist Joseph E. Stiglitz in the business newspaper Világgazdaság: "Following the great recession, the states are now suffering unprecedented deficits. ... Many countries are introducing new austerity measures. ... But anyone hoping for a major deficit reduction will be bitterly disappointed, because the recession is putting pressure on tax revenues, and the demand for unemployment insurance and social services will grow. ... It is relatively simple to formulate a plan for reducing the deficit that increases efficiency, supports growth and reduces inequality. ... First of all, expenditures for high-yield public investments should be greatly increased. ... Secondly, military expenditures must be reduced. ... Then, welfare for corporations must be removed. ... The creation of a more just and efficient taxation system is also essential, removing special treatment of capital gains and dividends. Why should those who work for their money pay higher taxes than those who earn a living through speculation, often at the expense of others?"

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