The U.S. recovery has primarily benefited the top 1% of the population, economist Joseph Stiglitz said Thursday at an Horizons ETFs Insight Lecture in Toronto.

The 2001 Nobel Prize winner adds the country’s actual unemployment rate is much higher than advertised because of the questionable way the figure’s calculated. It’s based on the number of people actively looking for a job; those who want a job, but have given up the search, aren’t officially counted.

Read: U.S. adds 192,000 jobs in March

If you adjust the unemployment rate with these Americans in mind, it’s “more like 10% or 11%,” says Stiglitz, not the 6.5% the government touts.

He notes that among males, median income (adjusted for inflation) is lower than it was 40 years ago. “There are a lot of angry men in the United States [because] they thought they were going to do better than their parents, but they’re doing worse.”

Stiglitz says the economy wasn’t in good shape pre-crisis, either.

“Before the crisis the economy was, in a fundamental sense, sick. What kept the U.S. economy going was artificial—a bubble. If it hadn’t been for the bubble, the economy would have been weak. That means we shouldn’t go back to 2007, because that would necessitate creating another bubble. And that’s not the basis of sustained, robust growth.”

Stiglitz isn’t optimistic America’s problems will be fixed any time soon.

“Monetary policy is not going to get us out of this crisis. It’s reached its limits; that was clear in 2009.”

Read: Federal Reserve says no to big bank dividend hikes

He says part of the answer is fiscal stimulus. But this is a tough sell politically in both the U.S. and Europe. “So, the overall outlook remains dismal unless there are major changes in policy, which I don’t see coming.”

Japan’s Abenomics, which involves using monetary and fiscal stimulus along with structural reforms, provides the basic formula for dealing with the U.S.’ and Europe’s economic woes, says Stiglitz.

“You need all three arrows working together. The U.S. and Europe have been focusing basically on one arrow – monetary policy – and that won’t do the trick.”

Political hurdles mean “the likely outcome is the U.S. and Europe will face a long-term Japanese-style malaise. And Europe will be worse than the U.S.”

But for both, it’ll be much worse than what Japan experienced, Stiglitz concludes, because even in its malaise, Japan’s economic performance (adjusted for the labour force decline of 0.75% a year) was better than most other advanced countries.