April 2012: "The month the confidence fairy died"

Paul Krugman, who has been advocating expansionary monetary and fiscal policy for years, weighs into the austerity debate (again):

This was the month the confidence fairy died. For the past two years most policy makers in Europe and many politicians and pundits in America have been in thrall to a destructive economic doctrine. According to this doctrine, governments should respond to a severely depressed economy not the way the textbooks say they should — by spending more to offset falling private demand — but with fiscal austerity, slashing spending in an effort to balance their budgets. [...]
The good news is that many influential people are finally admitting that the confidence fairy was a myth.

 Source: NYTimes

We'll see if the confidence fairy evolves into another dead idea of zombie economics.

See also: Time to shift the austerity debate in Europe