Germany’s welfare state and work-time subsidies constituted real stimulus during the downturn.

Evidence

During spring 2010, with the immediate danger of financial collapse abated and the new threat of sovereign contagion yet to fully emerge, a new ideological alignment began to take shape. For the previous year the United States, along with the British under the Labour Party’s Gordon Brown, had increasingly questioned Germany’s commitment to stimulating its economy. Germany was attacked for essentially free-riding on other countries’ stimulus efforts, a charge it denied. In fairness, when one takes into account Germany’s actual stimulus measures, such as its work-time subsidy and the impact of its bigger welfare state in a downturn, the Germans had more than a point in their favor. — Mark Blyth, Austerity, 170

Categorization

• XREF: Connects to the austerity literature on how hidden fiscal stabilizers function as effective stimulus, relevant to Mattei and critiques of the ‘German free-rider’ framing. — connects to: German anti-stimulus stance stems from a belief that government policy failures cause crises — Mark Blyth, Austerity: The History of a Dangerous…, 166

Broader Connections

• German anti-stimulus stance stems from a belief that government policy failures cause crises #contradicts (0.85) — Mark Blyth, Austerity, 166