Peter Radford — The Austerity Flop

1. Austerity advocates have been shown to be wrong. They have no credibility going forward. We should ignore them. They argued that less government spending would somehow impel a surge in private activity sufficient to offset the lost demand due to austerity. It didn’t. The private sector has recovered in many respects – consumer spending is top, so is investment – but by nowhere near enough to get the economy out of the doldrums.

2. The political advocacy of austerity was not about austerity as a way of freeing up the private sector, but was about reducing government as a factor in the economy. It was not an economic policy at all, it was an expression of an ideological position. Austerity advocating economists were simply providing cover for a deeper anti-social motive, that is now exposed clearly. Most of those economists are now silent, but none are retracting their work. Why should they? Their job is done.

Real-World Economics Review Blog
The Austerity Flop
Peter Radford