Germany’s growth in this year’s second quarter was 2.2 percent on a quarter-to-quarter basis. That means it is growing at almost 9 percent a year. Its unemployment rate has fallen to 7.5 percent, below what it was at the start of the global financial crisis—indeed, the lowest in 18 years. The second-biggest Western economy appears to be handling this deep recession much more effectively than the biggest—and emerging from it much earlier.
This means that something in our economic dogmas is probably false. Perhaps the policies of Keynesian stimulus favored by the Obama administration are simply misguided, and Germany is reaping the benefit of not pursuing them.