A threadbare set of ideas
May 1, 2013 1:40 AM Subscribe
The Austerity Delusion: Why a Bad Idea Won Over the West. "Austerity is a seductive idea because of the simplicity of its core claim -- that you can’t cure debt with more debt. This is true as far as it goes, but it does not go far enough. Three less obvious factors undermine the simple argument that countries in the red need to stop spending. The first factor is distributional, since the effects of austerity are felt differently across different levels of society. The second factor is compositional; everybody cannot cut their way to growth at the same time. The third factor is logical; the notion that slashing government spending boosts investor confidence does not stand up to scrutiny."
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