More Stimulus, Not Austerity: Stiglitz

Nobel Laureate and prominent economist Joseph Stiglitz told CNBC Wednesday that governments need to focus on stimulus rather than austerity in order to keep businesses spending and the economy growing.

Stiglitz said, "We have to get the economy going before firms are going to invest. There is an idea somehow that when the government cuts back, the private sector will get confidence and that will lead to more spending. The fact is households in America and many other parts of the world are burdened by debt, and business is not going to spend as long as governments and consumer are not spending."

Rather than cut spending and raise taxes Stiglitz said the country should focus on high-return investments in public technology, infrastructure, and education. Stiglitz said the dangers of falling into a double-dip recession in the U.S. are now "very high" and he voiced support of the economic warnings issued by Paul Krugman in a New York Times op-ed Sunday.

Stiglitz ended the interview by adding that austerity programs being implemented in Europe are leading to downgrades because business growth will be lower and economic problems will be greater.

Learn how to find the best stocks to trade each day in our 70 page E-Book and 90 minute online video for free.