Those who know me know me to be a rather big supporter of the left-wing British MP George Galloway, because of his foreign policy work in the Middle East. This is a personal bias I have.
My economic views, however, are less personal and more scientifically justified. When any economic downturn hits, there are those in governments that say we need to collectively tighten our belts till we grow again and because we the people are the government, the government is included in this list This is what I would term the austerity lot. There are others, however, who feel that government must be the spender of last resort, thus expanding and making up for the slack in the rest of the economy -- the Keynesians. Which strategy does better?
To get an answer, we must define the terms -- what does better mean? Better in the sense of a shallower dip in aggregate economic growth as measured by GDP. Our three candidate countries -- posterboys for austerity, Germany, posterboys for ramping up government spending, China, and a third country that did something in between, the United States. The results are below, followed by the code used to generate the plot:
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