Four Rules to Remember in the Age of Austerity: Matthew Lynn

One thing has become clear during the sovereign-debt crisis: Governments everywhere are going to be cutting their spending savagely over the next five years.

They may do it under the direction of the International Monetary Fund, like Greece. Or voluntarily, like the U.K. and Germany. Or slowly and reluctantly, like the U.S. One way or another, it has to happen. You can’t run deficits of 10 percent of gross domestic product or more forever.