And What Are Our Immigrants from Overseas, Chopped Liver?
Fifty-Two Little Herbert Hoovers

More Magical Foreign Growth-Promoting Fiscal Austerity

Paul Krugman:

Magical Foreigners, Austerity Edition: [N]ow the cause is fiscal austerity — and we keep hearing about supposed examples of countries that experienced a boom after tightening fiscal policy.... Canada in the 1990s... turns out to be a quite different story. Now we’re hearing about Ireland in the 1980s.... And whaddya know: this story is also not at all the way it’s being told (pdf). Yes, Ireland had fiscal austerity — but it also benefited from a devaluation and an inflationary boom in the UK. Oh, and Irish interest rates fell sharply... because they were very high to begin with... not much of a precedent for the United States today, which starts with very low rates. So yes, you can boost your economy with fiscal austerity, as long as you also devalue your currency and sharply reduce interest rates; also, incantations will destroy a flock of sheep, if administered with a sufficient portion of arsenic.