Greetham: Austerity debate dead but not gone

Now the world economy is recovering, market attention has moved on from competing strategies to deal with the debt crisis.

However, fiscal policy settings remain critical, as Federal Reserve chairman Ben Bernanke’s surprise refusal to taper quantitative easing ahead of a possible government shutdown shows. Fiscal policy is likely to come to the fore again if global growth hits a serious weak patch before bank balance sheets are fully restored and it has a bearing on the policies needed to sustain the recovery. Neither side of the great debate is conceding defeat. The mainstream media in the UK almost universally concludes that signs of a strong housing-led recovery vindicate the government’s austerity pol...