DIA

We need to learn what happens when public spending is repressed. It does not lead to efficiency gains. Sometimes the consequences are disastrous.

The private enterprise failures in the Global Financial Crisis led to public expenditure changes. The Americans poured them into subsidies supporting the bankers, the Europeans went for Austerianism cutting back in the public spending on the ‘undeserving’, The Chinese – the last Keynesians? – splashed out on infrastructure, which has enhanced their growth prospects.