This is doubly odd since the cause of the anticipated slowdown, the debt-ceiling agreement of August 1, 2011, between Republicans and Democrats in the US Senate that sought $2.1 trillion in budget cuts over a decade (austerity), was supposed to calm the markets by giving them the budget cuts that they craved. Yet this renewed commitment to austerity instead signaled lower growth due to less public spending going forward in an already weak economy, and stock markets tanked on the news. As Oliver Blanchard, the International Monetary Fund’s (IMF’s) director of research, put it with a degree of understatement, “Financial investors are schizophrenic about fiscal consolidation and growth.”

Mark Blyth, Austerity, loc. 28