By now, it’s been thoroughly proven by events that austerity policies backfire. Cut public spending in a deep downturn, and you only worsen the slump. Europe is the more extreme version of the proof, but even the United States, which is technically out of recession, faces a needlessly slow recovery. We’ve reduced deficits by slashing spending, raising taxes, and making sequester deals, but the supposed reward in the form of restored business confidence never arrives. Austerity, as Mark Blyth writes, neither restores growth not reduces the debt ratio, because slow growth (and in some cases negative growth) makes the debt loom that much larger.
|By: Robert Kuttner Sunday August 18, 2013 1:59 pm|
|By: Jim White Monday November 22, 2010 8:40 am|
Poor little Ross Douthat, this analysis gig of his is so hard, especially while the fantasy world of conservatism continues crashing all around him when his primary job is to keep that fantasy alive, at great cost to the real world. Today we find little Ross taking on the crash of the Irish economy. In flailing about for an explanation of what has happened to this former poster-child of Chicago economics run wild, Douthat briefly flirts with an accurate explanation of what went wrong, but then pays proper homage to his overlords by discarding the painfully obvious truth in favor of yet another conservative talking point that is easily demonstrated to be false.