Today’s Must-Must-Read: Robert Skidelsky: Messed-Up Macro

…After the financial crisis of 2008 erupted, we got the Great Recession instead. Governments managed to limit the damage by pumping huge amounts of money into the global economy and slashing interest rates to near zero. But, having cut off the downward slide of 2008-2009, they ran out of intellectual and political ammunition. Economic advisers assured their bosses that recovery would be rapid…. But then it stalled in 2010…. It is now pretty much agreed that fiscal tightening has cost developed economies 5-10 percentage points of GDP growth since 2010. All of that output and income has been permanently lost… [and] made the task of reducing budget deficits and national debt as a share of GDP much more difficult…. That should have ended the argument. But it did not…