Austere fiscal contraction produces the very outcomes its advocates seek to avoid

Evidence

As pro-austerity advocate John Cochrane of the University of Chicago put it, “Every dollar of increased government spending must correspond to one less dollar of private spending. Jobs created by stimulus spending are offset by jobs lost from the decline in private spending. We can build roads instead of factories, but fiscal stimulus can’t help us to build more of both.” There is just one slight problem with this rendition of events: it is completely and utterly wrong, and the policy of austerity is more often than not exactly the wrong thing to do precisely because it produces the very outcomes you are trying to avoid. — Mark Blyth, Austerity, 26

Categorization

• SEED: The ‘voluntary deflation as self-defeating cure’ claim could anchor an essay/review of the austerity intellectual history framing.
• XREF: connects to: Austerity suppresses consumer demand by starving the population that sustains the economy — Clara E. Mattei, Escape from Capitalism, 349; Austerity has failed systematically whenever governments face gold-standard-style constraints — Mark Blyth, Austerity: The History of a Dangerous…, 504; Austerity became self-defeating because it worsened the deficits it claimed to fix — Mark Blyth, Austerity: The History of a Dangerous…, 516 (+1 more)

Broader Connections

• Austerity became self-defeating because it worsened the deficits it claimed to fix #expands (0.93) — Mark Blyth, Austerity, 516
• Austerity suppresses consumer demand by starving the population that sustains the economy #expands (0.92) — Clara E. Mattei, Escape from Capitalism, 349
• Austerity has failed systematically whenever governments face gold-standard-style constraints #corroborates (0.85) — Mark Blyth, Austerity, 504