From 1932 to 1936 government spending was cut by 20 percent, industrial production fell nearly a quarter, the real exchange rate rose, and the money supply collapsed. Any attempt to compensate led to capital flight, which the Bank actively supported as a way of disciplining the government. The Bank planted stories in the press discrediting fiscal experiments elsewhere, insisted on budget cuts as the only way forward, and generally vetoed any policies that the democratically elected government promoted that did not meet with its approval.

Mark Blyth, Austerity, loc. 551