The Austerity vs Stimulus deabte

 Austerity vs Stimulus is a collection of new and old essays complied by economic historians seeking to provide alternative answers by clarifying and balancing the arguments from both sides.

Germany is rock of stability and serenity compared to Italy’ stagnation, France’s morosity,  Britain’s self-exclusion from European Union, Poland’s drift from the rule of law, in the plan for the political and economic unification of Europe the 19-nation euro-zone, as Germany exercises power in order to protect German economy and anchor their post-war recovery and prosperity.

This book debates the economic and political logics of the austerity policies that have been implemented in the UK and in the Eurozone since 2010. The editors complied a collection of articles by Alberto Alesina, Ken Rogoff, Tim Besley, David Graeber, Vince Cable and Paul Krugman.

Nick Timothy, former Chief of Staff for Theresa May said as part of his resignation letter after the after the Conservatives lost their majority in the recent election, “ the simple truth is that Britain is a divided country as many are tired of austerity”.

In their book, Austerity is defined as policies to reduce the amount the government borrows each year., usually through cutting spending. The Times article in 1932 elaborate this by saying “ when individuals or the state hoard money during periods of recession, the economy is deprived of demand that would otherwise raise output and bring employment back to normal level”.

A counter argument by Friedrich Hayek said “ High government borrowing causes more problems than it solves as it raises the interest rate and so crowds out private investment. Naill Ferguson argues “ the danger is that people will lose faith in the management of the economy, inhibiting investment”.

That supporting austerity says that a government accumulating debt will eventually have a fiscal crisis, like Greece. The book deals with the question of how austerity captured the political mainstream.

Towards the end chapters one feels that despite contribution from both sides, this collection leaves the impression that austerity has been a “distinctly British delusion”.

 Austerity vs Stimulus: The Political Future of Economic Recovery by Robert Skidelsky and Nicolo Fraccaroll Palgrave Macmillan £22.99/ $29.99