Nobel Prize Winning Economist Joe Stiglitz Fails Economic History.

IBD debunks some myths:

My colleague Dan Mitchell and I have long been baffled by the Quixotic efforts of such prominent economists Paul Krugman and Joe Stiglitz to blame economic stagnation in the eurozone on insufficient government spending.

Government spending in the euro countries rose from 45.3% of GDP in 2007 to 49.5% in 2013, according to Eurostat, with particularly huge increases in Greece, France, Italy and Portugal. The table below shows how little austerity there has been in euro public sectors.

Stiglitz writes: "Austerity had failed repeatedly, from its early use under U.S. President Herbert Hoover, which turned the stock-market crash into the Great Depression, to the IMF 'programs' imposed on East Asia and Latin America in recent decades. And yet when Greece got into trouble, it was tried again."

In reality, those are all examples of the failure of higher tax rates, not government spending restraint.

In 1931, Herbert Hoover increased federal spending by 43% in a single year — to $4.3 billion from $3 billion in 1930. In June 1932, however, Hoover greatly increased all income-tax rates, with the top rate rising from 25% to 63%. Federal revenues fell from 4.4% of GDP in 1930 to 3.0% in 1933, but the private economy fell even more.

Remember, this is the same Joe Stiglitz that couldn't understand the math behind Fannie Mae. Thanks Joe!