This war is the Heir to the Throne of the Kingdom of Bad Ideas!
A recipient of the 2001 Nobel Prize for Economics, Joseph Stiglitz, warned today that a US war against Iraq would have a “very negative” impact on the global economy.
He also accused President George W. Bush of "mismanagement" of the US economy and forcing a global downturn on the rest of the world.
Speaking at the World Knowledge Forum here, Stiglitz said many people hoping for an economic boom from a war on Iraq would be disappointed.
They confuse what happened in World War II with what could happen today, he said. World War II helped the world out of global deflation and had a positive impact on the world economy, he said.
"This current war, if it occurs, is likely to have a high probability of having a very negative impact," he told journalists.
He said the differences between World War II and a possible war against Iraq was that World War II was a war of total mobilisation with huge expenditures.
But a war on Iraq was likely to involve fewer people and less expenditure in terms of the global economic growth.
"The benefit in terms of the economics of that stimulus (from a US-Iraq war) is likely to be more than offset by the adverse effect that uncertainty is having on investment, consumption and the possible advserse effects on oil prices," he said.
"This is a very different kind of situation from World War II. Therefore, (there are) much more downside effects in terms of the global economy." He criticised the Bush administration for opting for tax cuts over stimulus packages he and other economists advocated. "Now I believe quite strongly that the Bush administration has mismanaged economic policy for the past two years," said Stiglitz, a Columbia University professor.