Since Ireland and Denmark showed the way 25 years ago, numerous governments have dreamed of successful “expansionary budgetary contractions.” But a closer look at these oxymoronic, quasi-miraculous episodes reveals that, for the usual recessionary impact of fiscal consolidation to be eliminated or even reversed, at least one of three conditions must be met: households’ precautionary savings decline; long-term interest rates fall; or a more expansionary monetary policy stimulates demand and weakens the exchange rate.