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Cutting taxes won't help recovery: Joseph Stiglitz

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The US government should stimulate investment in order to ensure solid and sustainable economic growth, not cut taxes, Nobel Prize-winning economist Joseph Stiglitz told CNBC Wednesday. Stiglitz, who earlier this month accused the Federal Reserve and the European Central Bank of throwing the world into "chaos" with their money-printing, said the first round of the stimulus did work for the US economy and that without it unemployment would have peaked at 12 percent or even 13 percent. But the government has underestimated the severity of the downturn and did not design the stimulus as well as it could, he added.

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