Our Acute Case of Fiscal Madness

Our Acute Case of Fiscal Madness
Paul Krugman, Truthout: "Future historians will marvel at the austerity madness that gripped policy elites in the spring of 2010. In a flurry of blind panic and irrational exuberance, organizations from the European Central Bank to the Organization for Economic Cooperation and Development suddenly abandoned everything we had learned, at a bitter cost, about economics during recessions and decided that fiscal austerity was the way to go while the world was in the depths of a slump - indeed, many claimed that spending cuts would actually be expansionary. Not only was there an illogical push for austerity, but there also emerged a widespread demand for central banks to raise interest rates in the face of falling inflation and high unemployment."