Includes bibliographical references and index.

"A timely, broadly revisionist, essential book by one of our foremost economic observers takes down one of the most cherished tenets of contemporary financial thinking: that spending less, refusing to forgive debt, and shrinking government--"austerity"--is a solution to the current economic crisis. Since the collapse of Lehman Brothers in September 2008, too much of our conversation about economic recovery has centered on the question of debt: whether we have too much of it, when to forgive it, and how to cut the deficit. Robert Kuttner makes the most powerful argument to date that these are the wrong questions and that austerity is the wrong solution. Blending economics with historical examples of effective debt relief and punitive debt enforcement, he makes clear that universal belt-tightening, as a prescription for recession, simply defies economic logic. Just as debtor's prisons once prevented individuals from working and thus being able to pay back their debts, austerity measures shackle, rather than restore, economic growth as the weight of past debt crushes the economy's future potential. Above all, Kuttner shows how austerity serves only the interest of creditors--the very bankers and financial elites whose actions precipitated the collapse. Lucid, authoritative, provocative--a book that is certain to be widely read and much debated"--