This is not the case, particularly in Britain, where public spending is still rising. It is also not true that if “we all reduce spending at the same time, we all grow poorer”, as one cannot spend oneself into prosperity.
It is an inversion of the truth to say that austerity measures were put in place after 1929, as the 1930s were dominated by reckless spending and currency inflation together with hyper-protectionism that brought world trade almost to a dead halt.
What is to blame for the current global economic malaise is the false belief that a free lunch, in the form of state intervention, is possible.
This idea, promulgated by Marx and Keynes, dominates the world, and economic growth will not be achieved until it is rejected.