The Merkel- Steinbrueck campaign debate: So how has "austerity" worked for Germany

The term austerity is a misnomer because it implies that government creates spending when all it really does is move money around.  The point is that money has to come from someplace.  The above figure is from my book "At the Brink."

I bring this up because Germany of the debate between Chancellor Angela Merkel and her Social Democrat challenger Peer Steinbrueck. In fact, despite Steinbrueck's claim, Germany has done quite well compared to the rest of Europe and especially the US.  From Reuters:

The only TV duel of the campaign, watched by an estimated 15 million viewers, was one of SPD candidate Peer Steinbrueck's last chances to change the momentum in a race in which he has trailed the popular Merkel from the very start. 

He accused the conservative chancellor, who is seeking a third term in the September 22 vote, of crushing southern European countries with austerity, failing to properly manage an exit from nuclear energy and overseeing a rise in low wage jobs. 

"For four years we have been at a standstill. I want to change this," Steinbrueck said.
Merkel, 59, said SPD plans to raise taxes would put Germany's prosperity at risk, and noted that Steinbrueck's party had supported her euro policies throughout the crisis. Smiling, she turned to him and said: "You voted for everything." . . . .