The era of austerity began Feb. 5, 2010. That was when the finance ministers and central bankers of the seven major industrialized powers flew to the remote Arctic village of Iqaluit, Canada. That meeting of the Group of Seven came at a time when the extraordinary financial rescues and fiscal and monetary stimulus of the crisis seemed to have done their job and the world economy was on the mend.

Sovereign debt crises had emerged in Greece and Dubai, and to the men and women in that summit in the Arctic, held amid weather that was a balmy minus 18 degrees Celsius, there was growing conviction that it was time to look toward the exits, to begin bringing deficits down and think seriously about how to unwind the expansive monetary interventions that had been taken. Also, there was dogsledding.

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