Originally Posted by
wiggin
Y'know, this debate about Germany is funny and everything. See, the US is closer to pre-recession GDP than Germany, despite their remarkable growth, mostly because the recession hit them very hard (notably due to world trade that was drastically cut). However, to argue this happened in the absence of government stimulus is a total crock. Germany had one of the most generous fiscal stimulus packages in the Western world, and it furthermore had gone longer than in most of Europe, where they're already pushing austerity (all rhetoric aside, Germany's announced austerity plans don't phase in until 2011-2012). In particular, they spent quite a bit on subsidized work hours schemes to prevent unemployment (the German labor market never had as deep unemployment as the US due to this), a cash-for-clunkers style program, tax credits, infrastructure building, etc. It added up to at least 1.5% of GDP in 2009 and 2% of GDP in 2010, and there are still some lagging expenses they're paying.
So, bottom line: you're both wrong. Germany is not some shining example of recovery since their GDP was trashed in the recession (notably because they rely on exports and didn't encourage enough domestic demand to make up the difference), but they also didn't show some remarkable fiscal restraint in avoiding a large stimulus package. Of course, some would argue the stimulus should have been larger and austerity postponed a little more, but that's a difference of degree.