Austerity became self-defeating because it worsened the deficits it claimed to fix

Evidence

Indeed, sustaining such high levels of unemployment had boosted unemployment transfers and worsened the deficit. This made any effort by the British state to borrow its way out of trouble ever more treacherous since doing so required further rounds of austerity policies to reduce the deficits that prior rounds of austerity had caused, so that Britain could be eligible for more loans to reduce the deficit. By 1931, Britain’s austerity policies had become self-defeating. — Mark Blyth, Austerity, 516

Categorization

• DEEPTHINKING: The paradox that austerity perpetuates the deficits it purports to cure — and degrades fiscal eligibility for borrowing — is a core mechanism of the whole austerity critique, worth holding up against Mattei’s account of the same dynamic.
• SEED: A targeted essay on ‘the self-defeating austerity loop’ — each round of cuts widens the deficit it was meant to close, making further borrowing require still deeper cuts — applies as readily to Greek debt negotiations as to interwar Britain.
• XREF: This is precisely the policy dynamic Mattei analyzes in the contemporary period: austerity contracted the economies it was imposed on, raising debt-to-GDP ratios rather than lowering them. — connects to: Austerity failed to deliver promised wage declines and deficit cuts in the REBLLs. — Mark Blyth, Austerity: The History of a Dangerous…, 607; The 1937 recession was a deliberate natural experiment in austerity that failed — Mark Blyth, Austerity: The History of a Dangerous…, 510; Austerity has failed systematically whenever governments face gold-standard-style constraints — Mark Blyth, Austerity: The History of a Dangerous…, 504 (+7 more)

Broader Connections

• Austerity has failed systematically whenever governments face gold-standard-style constraints #exemplifies (0.82) — Mark Blyth, Austerity, 504
• Austerity has never successfully reduced debt and instead causes instability, riots, and war #corroborates (0.78) — Mark Blyth, Austerity, 614
• Austerity suppresses consumer demand by starving the population that sustains the economy #corroborates (0.75) — Clara E. Mattei, Escape from Capitalism, 349
• Austerity since colonial times has devastated the global periphery #expands (0.72) — Clara E. Mattei, Escape from Capitalism, 288