By Joseph E. Stiglitz

(This article was received from Project Syndicate, an international not-for-profit association of newspapers dedicated to hosting a global debate on the key issues shaping our world.)

NEW YORK – Some say there are two issues in the coming American elections: the Iraq war and the economy. On days when the war seems to be going better than expected, and the economy worse, the economy eclipses the war; but neither is faring well. In some sense, there is only one issue, and that is the war, which has exacerbated America’s economic problems. And when the world’s largest economy is sick – and it is now very sick – the entire world suffers.
It used to be thought that wars were good for the economy. After all, World War II is widely thought to have helped lift the global economy out of the Great Depression. But, at least since Keynes, we know how to stimulate the economy more effectively, and in ways that increase long-term productivity and enhance living standards. …..