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When Theory and Reality Diverge
Jens Berger
Politics forces crises and prevents their ending everyday by holding to its ideological blinders. The state is not a private household and spending cuts always strike back on other actors of the economy. Every form of austerity policy always leads to declining aggregate demand. In Spain the unemployment rate has more than tripled from around 8% to 25% today. When theory and reality diverge, the theory is wrong, not the reality.

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