Now the OECD has shown that this isn’t right:
Now this isn’t to say that the fiscal response is right – it may be too small or too big. But it is to say that we aren’t pumping in a small response relative to the rest of the world. In GDP terms we are sixth – just behind Aussie.
Update 2: Appears that some countries were undermeasured by the report (ht Gareth):
As an illustration, tax cuts decided in 2006 or 2007 but implemented over the period 2008-2010 in Denmark, France, Poland and Spain are not included, although they may have contributed to cushion the economic downturn
This explains why the stimulus in these countries (excl Spain) was so low. And I can understand why Spain would need a larger stimulus with their high unemployment rate (* note I suspect that the 17.4% figure is an exaggeration – as I think they include more potential types of unemployment than we do)