The policy advice that adjusting public finances by cutting welfare is the best way to proceed is far too simplistic

The argument that cutting social spending is an essential part of necessary fiscal adjustments is pervasive. That slashing welfare does not harm economic growth while tax hikes do is treated as received wisdom by many academics and policymakers. Georg Wenzelburger deconstructs the argument in favour of welfare cuts, writing that we need a much more nuanced understanding of the underlying mechanisms which distinguish successful from unsuccessful adjustments.