Portugal proves that austerity doesn't work

Economists like Alberto Alesina and Silvia Ardagna reshaped the world when their theories of "expansionary austerity" were put into effect after the 2008 crisis: the idea that governments could "increase taxes, cut spending, and grow strongly" was powerfully tempting to the world's leaders, who saw in them a way to pull out of a recessionary spiral without limiting the number of yachts the oligarchs they depended on could afford. (more…)