And Germany Too ...

In a recent post (see post) we discussed the affordability of the UK fiscal stimulus. At the time, the German Finance Minister - Peer Steinbrück - was dismissive of the policy. He saw it as a means of buying our way out of recession, which it is, and of which he disapproved.

It's funny how events catch up with us. We now find that the German Federal authorities plan exactly the same stimulus (see article). Of course, we could talk about the correctness of the arguments for the fiscal stimulus, but a more telling point is likely to be the German economy falling in an election year.

We need to remind ourselves that fiscal policy is all about politics and not economics. Sometimes we lose sight of that point.