Austerity and Growth Debate in the U.S. and Europe

As the global financial crisis has unfolded, debates have raged across the United States and Europe about policy responses and the role of government in countering economic decline, high unemployment and debt. Through both austerity measures and stimulus programs, Europe and the United States have at times taken differing approaches toward solving their economic problems. However, former European Central Bank Executive Board Member Lorenzo Bini Smaghi argues in his recent book, Austerity: European Democracies Against the Wall, that no matter the tactics, western approaches have focused only on the economic dimension of the crisis and failed to address the deeper and longer-term political problems.

On Thursday, September 19, Brookings hosted a panel discussion to explore the political and economic dimensions of the continuing crisis for the United States and Europe. Following remarks by Mr. Bini Smaghi, Brookings Senior Fellows William Galston and Douglas Elliott offered comments. Brookings Visiting Fellow Jeremy Shapiro provided introductory remarks and moderated the discussion.