Aditya Chakrabortty — A short history of austerity: it almost never works

...severe austerity tends to turn recessions into depressions, consign millions to the dole or under-employment and lead to frightening political turbulence.

The most famous episode of austerity was during the interwar years, as Germany, Britain, France and Japan all fought to stay on the Gold Standard even amid the Great Depression. The deflationary impact of keeping their currencies pegged to gold, along with the austerity policies they followed to do so, was disastrous....

IAs the political scientist Mark Blyth says in his new book, Austerity: "Austerity didn't just fail – it helped blow up the world. That's the definition of a very dangerous idea." 

And yet when Europe's crisis began in earnest in 2009, rightwing politicians across the continent adopted the line that the best governments could do was cut spending to encourage the private sector to spend....

And where in Greece, historic cuts were rolled out in the name of economic modernisation, here Cameron [in the UK] wants to whip us into a "global race" [to the bottom].

The Guardian | Comment is free
A short history of austerity: it almost never works
Aditya Chakrabortty | The Guardian
(h/t Mark Thoma at Economist's View)