Columns


Greece has spent more than it ever produced

When looking out a window, it is easy to be fooled by your own reflection and see more of yourself than the outside world. This seems to be the case when US observers, influenced by their own country's fiscal debate, look at Greece. For example, Joseph Stiglitz regards austerity in Greece as a matter of ideological choice or bad economics, just like in the US.

According to this view, those who favour austerity must be obsessed with the theory, given the availability of a kinder, gentler alternative. Why would you ever vote for austerity when parties like Greece's Syriza or Spain's Podemos offer a pain-free path?

The question reflects a lamentable tendency to conflate two very different situations. In the US, the issue was whether a government that could borrow at record-low interest rates, in the middle of a recession, should do so. By contrast, Greece piled up an enormous fiscal...

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