When other Group of 8 nations pressed Angela Merkel to support measures to stimulate euro-area economies at a summit over the weekend, it wasn’t because of a mere philosophical difference between the German chancellor and other G-8 leaders. Since 2008, the United States and Europe have put into practice two radically different theories of how indebted governments should respond to economic duress. America’s experience argues for economic stimulus in the short term — coupled with a concerted plan to bring down long-term liabilities.
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I don't think "austerity" is intended as a strategy for growth. Rather, it is what unavoidably happens when a country can't find someone to lend it money that it otherwise doesn't have to pay its obligations, either on terms that it can live with, or even worse, on any terms at all. Would the writer of this editorial buy Greek, Spanish or Italian bonds, esp if your family depended on you to support their needs? I can't imagine that anyone rational would answer yes. So, why on earth should the German govt be any different? Here in the US, my sense is that what the "crazy" Tea Partiers are demanding is that we don't ever get ourselves close to the predicament that those other countries have found themselves in. Not sure what's so hard to understand here?
Personally it's always made sense to have deficits during a recession and/or high unemployment. What shouldn't happen is to maintain these deficits during economic good times (2003-2007)
No doubt something like "growth" is needed in addition to austerity, as we have economies organized entirely around ever-increasing production and consumption. But wouldn't it be nice if some economists actually did something helpful for the human race, and studied how more sustainability might be integrated into our economic systems?