Austerity
Butkus et al: “[W]e found a significant U-shaped debt-growth link when estimated in the sample of countries with to some extent similar institutional quality as measured by government effectiveness. However, counties with high (low) government effectiveness can start facing negative impact at very different ratios of public debt to GDP. Depending on estimation technique, debt turning point varies from 46% to 229% and from 8% to 145% of GDP in countries with respectively high and low government effectiveness. Such extreme variation is sharply reduced if we take trade balance into account. Relaying on the trade and budget deficit relationship (“twin deficit” hypothesis) and expenditure multiplier effect, in this paper we assume that besides government effectiveness, a trade balance is another crucial factor determining debt threshold level. While exact debt turning point still varies depending on estimation method, when we consider both factors, that is, government effectiveness and trade balance, all specifications confirm the main idea, that countries with better quality of governance and lower level of trade deficit have higher debt threshold level”
To summarize: you can’t simply pull out money out of your ass and have it be a positive effect on government level, there is a point the trick loses its effect.
Sure crisis is a different situation.
US, as the printer of the world’s reserve currency is a different beast as well.
Noone is arguing not giving money to who needs it the most. If u exceed the ceiling of debt effectiveness, then go to the rich, and tax their ass.
“Oh but don’t you know governments can print money for themselves”. Again, different for US. Everyone else has to worry about inflation, and the price of their currency. We can’t make coarse statements about austerity, money printing wout refering to thresholds, inst situation of each counntry.