First, Stiglitz sets out a general critique of the assumptions in neoclassical models, starting with the "#EfficientMarket" hypothesis, that holds that the market is *already* making efficient use of all our national resources, so any government spending will "crowd out" efficient private sector activity and make us all poorer.

There are trivially obvious ways in which this is untrue: every unemployed person who wants a job is *not* being used by the market.

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If #Neoclassical theory is to be believed, the #rateofinterest affects #savings. Yet savings rates are widely dispersed, and are slow to adjust. There are no clear signs of competitive rates from the dominant high street #banks. Inertia not the market rules. For some (the more wealthy) low rates of interest will make risky investments more attractive, but it’s hardly an #efficientmarket which thereby promotes speculation.