The French newspaper Le Monde published an interview with Joseph Stiglitz, where the Nobel Prize winner in Economic Sciences and a critic of the European austerity policy, reveals the reasons of economic inequality in the US and Europe as well as its political and social consequences.
In his new book "The Great Divide: Unequal Societies and What We Can Do About Them" Stiglitz names inequality to be the reason of the crisis in 2008.
As he noted, today it also impedes the economy recovery. "Inequality becomes a dangerous trap," the expert said.
The social lift does not operate for low-income Americans, who have only the most limited medical insurance and almost no access to education. There is no growth of consumption without the growth of revenues, that impedes the economic development. The US families' expenses have been artificially and excessively boosted with the credits. The damage is incompatible with the economic growth.
And inequality in the US is a result of political decisions. Some countries as Singapore and Mauritius managed to diversify their economy staking on the people's education. The US should learn a lot from these examples.
To have a sound growth, the US need investments into scientific research, infrastructure, and education, as well as extended access of the Americans to higher education. Setting a minimum wage would also be a good decision. The taxation should also be more progressive and equal. The fact that a speculator pays less than a worker is also abnormal, the economist believes.
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