Of course They Were Wrong

But fat chance any government buying into neo-liberalism will change course:

The new “IMF Working Paper,” titled “Growth Forecast Errors and Fiscal Multipliers,” prepared by Blanchard and Daniel Leigh of their Research Department, reports that whereas the IMF had been accepting conservative economists’ estimates that the multiplier was “about 0.5” percent growth, the “actual multipliers were substantially above 1 early in the crisis,” which was the period when the IMF was recommending and pursuing “fiscal consolidation,” which is called in the United States “austerity.”

In other words, the policy recommended by the Republican Party’s economists, and which has actually been tried especially in Europe, has failed miserably.

Tell that to Obama and his ilk, as well. He still adheres to discredited Friedman economics.