That'd be the fallacy of the excluded middle. There's middle ground between austerity and wasteful government spending. It's not as though countercyclical spend

That'd be the fallacy of the excluded middle. There's middle ground between austerity and wasteful government spending. It's not as though countercyclical spending is particularly heterodox (though certain implementations can be). For example, one of the most successful anti-austerity measures was the "kurzarbeit" program of the German government, which prevented mass layoffs and kept the German "mittelstand" (the backbone of the German economy) afloat. "Kurzarbeit", very simply put, is a program that allows businesses to keep their employees employed part-time, while the government makes up for most of the loss of wages by paying them benefits. Once the recession is over and orders are coming in again, they go back to full-time employment. People don't lose their jobs, there's no drop in consumption, and businesses don't have to go through painful layoff and rehiring processes for high skill positions. In America, which has a more consumption-driven economy, food stamps (i.e., SNAP) have been shown to be one of the most effective forms of stimulus; not only do they keep low-income families fed, but because the marginal propensity to consume is basically 100% for SNAP recipients, this then creates business for supermarkets, which in turn can keep employing their workers who also have a high marginal propensity to consume, and so forth. As a result, increases in SNAP spending were probably one of the most successful parts of the Recovery Act [1]. [1] http://www.cbpp.org/research/snap-is-effective-and-efficient http://www.cbpp.org/research/snap-is-effective-and-efficient