Stiglitz Exposed

Conn Carroll / April 15, 2008

We’ve already addressed Jospesh Stiglitz and his claims that the Iraq war will cost $3 trillion (except when it costs $5 trillion) a number of times. But now that he is getting air time in front of Congress others are also documenting how far fetched his claims really are.

From New York Sun’s Christopher Wilcox:

The intellectual dishonesty of this book can be most clearly seen, however, in its discussion of general American defense spending. The authors note that defense expenditures have been “rising rapidly as a share of GDP — from 3 percent in 2001 to 4.2 percent in FY 2008.” They do cover themselves by admitting that this rise “is not a historic peak or anything close to it,” but they fail to disclose that defense spending was a whopping 13% of GDP in the halcyon 1950s! Even with two active wars and all the other antiterrorism measures, defense spending under President Bush is 50% lower as a share of GDP than it was under Ronald Reagan.

From former Council of Economic Advisers chair under President Bill Clinton Martin N. Baily:

The credit crisis we got into is because of the housing boom, the relaxation of lending standards and certainly a lack of adequate supervision. I don’t see a connection with government borrowing.

From National Review’s Larry Kudlow:

First point: The U.S. has spent roughly $750 billion for the five-year war. Sure, that’s a lot of money. But the total cost works out to 1 percent of the $63 trillion GDP over that time period. It’s miniscule. … the anti-war forces might want to recall John F. Kennedy’s inaugural address, in which he called on Americans to “Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to ensure the survival and the success of liberty.” Do these folks actually think 1 percent of GDP is too large a price, too heavy a burden? I sure hope not.