Editorial to the special issue

Fiscal policy witnessed a double U-turn, or policy pirouette, because of the global financial crisis.Prior to the 2008 crisis, all Western governments were defending the need to balance public-sector accounts and target budgetary surpluses.The Canadian government, together with the German government, had perhaps been the most vocal and successful in achieving this fiscal objective, while most governments were emulating one another (at least in their official discourse) and metaphorically were tripping over each other to attain budgetary surpluses.However, after November 2008, all the G20 governments began to run significant discretionary budgetary deficits arising from temporary consumption tax cuts and the extension of unemployment insurance benefits, as well as the decision to engage in large public investments (Auerbach et al. 2010).According to estimates, these stimulus plans in the G20 countries were in the order of about 2 per cent of GDP on average at the time (Antunes et al. 2010: 5).By June 2010, however, Western governments committed themselves once again to reverse their activist fiscal policy position to achieve budgetary balance.In recent years, a slight rift seems to have appeared in the fiscal policy discourse among Western governments of Europe and North America, with the latter somewhat deviating in their commitments to balanced budgets, especially the Canadian government after 2015.Despite these recent policy differences internationally, according to conventional wisdom, nowadays still popular among a large number of mainstream economists, it would seem that, after the shock and accompanying fears generated by the financial crisis had suddenly tempted so many governments to experiment with Keynesian fiscal policy, the fiscal authorities quickly came to the realization that such policies were misguided.This was so because of their supposed lack of financial sustainability and fears of possible inflationary pressures, thereby reverting once again to the well-worn traditional policy of sound finance.While this is what a good number of mainstream economists are saying, a deeper analysis would suggest that this is not what actually happened.While policymakers in many countries changed their tune and, indeed, subsequently opted for a policy reversal, this was in no way based on a repudiation of what they did.Quite to the contrary, on all occasions they have persistently celebrated their achievement of having combated the economic recession resulting from the financial crisis with their various fiscal stimulus packages!Contrary to the reading of mainstream neoclassical economists, what has actually happened because of the financial crisis is the metamorphosis of fiscal policy into a distinct form, a New Fiscalisman expression once coined by the late Martin

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