Austere Illusions: Fiscal contraction is contractionary, period.

In an article that originally appeared on Project Syndicate, Robert Skidelsky explores the illusions of austerity economics. Not only has austerity failed in being expansionary, it has also hit those at the bottom of the income distribution far more severely than those at the top and may have destroyed not just current but also potential output by eroding the “human capital” of the unemployed.