MercoPress. South Atlantic News Agency

Stiglitz warns about the Bush years' economy legacy

Joseph Stiglitz, Nobel Prize winner in Economics

United States president George W Bush will leave his successor a country in debt up to its ears, a depressed dollar as never seen before and a nation with a class structure closer to that of Mexico or Brazil, according to Nobel laureate Joseph Stiglitz in an article published in the December edition of Vanity Fair.

"When we look back someday at the catastrophe that was the Bush administration, we will think of many things: the tragedy of the Iraq war, the shame of Guantánamo and Abu Ghraib, the erosion of civil liberties", but the damage done to the US economy and its "repercussions will be felt beyond the lifetime of anyone reading this page". Stiglitz who lectures on economy at Columbia University argues that the fact that the US economy has not been in recession in the almost seven years of the Bush administration and the respectable low unemployment can't hide the other side: "a tax code hideously biased in favor of the rich; a national debt that will probably have grown 70% by the time this president leaves Washington; a swelling cascade of mortgage defaults; a record near-850 billion US dollars trade deficit; oil prices that are higher than they have ever been; and a dollar so weak that for an American to buy a cup of coffee in London or Parisâ€"or even the Yukonâ€"becomes a venture in high finance". Stiglitz recalls that when President Bush took office the US had an anticipated 2.2 trillion US dollars budget surplus, with which the US could have afforded to ramp up domestic investment in many areas. A budget surplus of 2.4 percent of gross domestic product (G.D.P.), which greeted Bush as he took office, turned into a deficit of 3.6 percent in the space of four years. The United States had not experienced a turnaround of this magnitude since the global crisis of World War II. "But the Bush administration had its own ideas", and the first major economic initiative pursued by the president was a massive tax cut for the rich, enacted in June of 2001, compounded by a second tax cut in 2003. This meant that those with an income over a million US dollars got a tax break of 18.000 US dollars, more than thirty times larger than the cut received by the average US citizen. Stiglitz also underlines that inequality is now widening in America, and at a rate not seen in three-quarters of a century. "A young male in his 30s today has an income, adjusted for inflation, that is 12% less than what his father was making 30 years ago. Some 5.3 million more Americans are living in poverty now than were living in poverty when Bush became president. America's class structure may not have arrived there yet, but it's heading in the direction of Brazil's and Mexico's".