False Economic Promise of Deficit Spending

“Austerity is out, growth is in.” This line — from a May 8 editorial in The San Francisco Chronicle — captures the change in economic vocabulary following the May elections in France and Greece. The new turn to the left in Europe is premised on a simple declaration: We are tired of austerity and we want to grow. That’s it. No one seems to be bothered with the rules of economics. Debt is good because it brings growth. Right?