We can, of course, raise issues with each position. To name but an obvious few: low growth could equally lead to more debt, so the solution would be to increase growth, not cut debt. Any savings that could be made through cuts now could simply be given away as yet another tax cut in the near future without any corresponding payoff to coming generations. A refusal by the United States to recycle foreign savings could be just as deleterious to the global economy as the excessive borrowing of foreign money, since the ability of the rest of the world to run a surplus against the United States, necessary because of its export-led growth models, would be compromised. Finally, financial repression, what Krugman implicitly advocates, does have some costs as well as benefits.

Mark Blyth, Austerity, loc. 53