Austerity measures harm economic recovery from "summary" of The Great Unraveling by Paul R. Krugman,University Paul Krugman
Austerity measures are often seen as a necessary evil in times of economic crisis. The idea is that by cutting government spending and reducing deficits, a country can regain the trust of financial markets and set the stage for future growth. However, the reality is often quite different. In practice, austerity measures can actually harm economic recovery rather than facilitate it. One of the main ways in which austerity measures can impede economic recovery is by undermining consumer confidence and spending. When the government cuts spending, it reduces the amount of money circulating in the economy, which can lead to a decrease in demand for goods and services. This, in turn, can lead to layoffs and wage cuts, further reducing consumer spending power. As a result, businesses may see a decline in sales and profits, leading to further layoffs and a vicious cycle of ...
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