writes a interesting piece in the Telegraph today.
It sticks to the theme of this week and is about the growing war of words between Germany and Greece and how the austerity measures really are very high impact and yet are being discounted by the EU.
Thinking about this along with the Moody's warning on the UK AAA rating this week and US growth stories though leads to me to two conclusions:
1) Lots of the focus on the Greeks is on their non-performance since 2010 to get their budget under control and now a sense of disbelief they they will ever manage to get a grip on it. This leads to much criticisms that the austerity is too much to bear and that Austrian style economics is to blame when they need a Keynesian boost.
Neither position is correct. What has happened is that the Greeks borrowed too much before 2010 - since then it has been like watching a car crash with the final end inevitable. More or Less austerity is not going to stop the rot when the debts are too high and a default is the only answer.
2) The UK is on the precipice itself. When looking at Greece the Labour party and BBC seem to be in unison in saying the cuts here are too fast. In reality it is not the cuts now, but the past spending. A fiscal stimulus now will boost the economy, but not as fast as the debt pile - so creating a future car crash like Greece.
Yet the US has pulled out some growth and has been more stimulative in its approach than the UK. This though is a red herring - the US debt position was not as bad as ours, they have deleveraged their economy more quickly and even so, their debt is increasing at $32 billion a day (the UK is doing that a month by comparison). What the long-term damage of QE is to the US and UK is not yet known either.
The debate 'too far, too fast' etc has become far too simplified and also as the months and years go by the real reason for the collapse - the huge bubble of debt still needing to be lanced - is being forgotten in the discussions.