Perhaps the Keynesians are right. But they have not prevailed because there are plausible reasons — though not conclusive — that they are wrong. Economists argue furiously over “multiplier” effects of larger government deficits: how much bang you get for every buck. One study concluded that the effect is much greater during recessions than during recoveries. This seems sensible and suggests that President Obama’s 2009 stimulus helped but that a new stimulus would do less.

It might prompt neutralizing actions. Suppose consumers interpret it as a sign of fear and lose confidence. If they raised their savings rate by one percentage point, that would offset $120 billion of extra government spending. Or investors might react to higher government borrowing by boosting interest rates, though that hasn’t happened yet. (Rates on 10-year Treasury bonds are 3 percent.)…

It may be that gobs of stimulus can’t rescue the global economy but that gobs of austerity might sink it. Our predicament is that it’s not just a few countries that face austerity but most advanced nations. We’ve arrived at a historical reckoning of the post-World War II welfare state, burdened with aging populations and huge debts. Germany’s gross public debt is 87 percent of its economy (gross domestic product); Japan’s, 213 percent; Britain’s, 89 percent; and the United States’, 101 percent, reports the BIS. (Its debt definition results in higher numbers than the standard U.S. measure.) Greece is not alone.

The United States, Europe and Japan still constitute roughly half the world economy. If all cut spending and raised taxes (to control debt) and increased interest rates (to pre-empt inflation), where would growth come from?