David Byrne and Will Doig in Reasons to be Cheerful:
After the 2008 financial mess, austerity was touted as an economic cure-all. Deep budget cuts were forced upon nations and their citizens as a prerequisite for bailout loans. Now, we’re seeing the fallout. Anti-austerity protests have gripped countries around the world, from Chile to Ecuador to Lebanon to Zimbabwe. We should have seen this coming—austerity isn’t the only option, or even the best one, for countries in fiscal distress. In fact, one country has proven that rejecting austerity is not only a way to survive, but to flourish. That country is Portugal.
Compare Portugal today with Britain. One could argue that the Cameron administration’s austerity policies created the anger and frustration than eventually led to Brexit. Austerity in Italy and Greece, too, seems to have fostered a surge in far-right politics. What’s worse, austerity hasn’t even done what it was supposed to: save faltering economies. A paper issued by the IMF’s chief economist five years after the financial crisis concluded that every dollar cut from government budgets actually reduced economic output by $1.50.