Nicholas Kristoff, of the New York Times, makes a strong argument against Mitt Romney’s suggested economic model. However, the argument is part of a much larger debate. Republican’s and Romney make a strong argument in favor of austerity and a Hayekian /Austrian School economic model, while Democrat’s and the President have been in favor of a pro-stimulus Keynesian model of deficits and spending.
The evidence for, or against, both economic models have been illustrated in Europe since the global financial crisis. The GOP has embraced the austerity of Great Britain and other nations and has seen their economies shrink and remain stagnant, while the US as other nations embarked on stimulus spending and are showing signs of GDP growth, however minimal.
In the last few years, Germany and Britain, in particular, have implemented precisely the policies that Romney favors, and they have been richly praised by Republicans here as a result. Yet these days those economies seem, to use a German technical term, kaput.
The International Monetary Fund this month downgraded its estimates for global economic growth, with only one major bright spot in the West. That would be the United States, expected to grow a bit more than 2 percent this year and next.
In contrast, Europe’s economy is expected to shrink this year and have negligible growth next year. The I.M.F. projects that Germany will grow less than 1 percent this year and next, while Britain’s economy is contracting this year.