Speaking as guest anchor on today's edition of CNBC's Squawk Box, respected Professor Joseph Stiglitz declared that the US economy faces its "worst recession since the great depression".
Prof. Stiglitz, a 2001 Nobel Prize winner for Economics and former World Bank Chief Economist, argued that the US was "most surely" in a recession and his real concern was "how long and how deep" it would last. He posited that with no savings, housing bust, and further unsustainable rises in food and energy costs (in other words higher costs and asset deflation) would drive the US economy to the worst recession in 80 years.
He also slammed the Bush administration's fiscal stimulus plan as "too little, too late", declaring that the Bush tax plan was not well thought out. As for the current Credit Crisis, he said that while it was not over yet, the concern of policy makers should now switch to the real economy.
Speaking on the same programme, Vice Chairman of Goldman Sachs International, Robert Hormats, said that while he felt that the FED had done enough to prevent a systematic collapse of the global financial system he agreed with much of what Stiglitz said.
Video available at: http://www.cnbc.com/id/15840232?video=722550381&play=1