Sir, Rather than being evidence of the failure of Keynesian stimulus, the increase in total public and private debt in the US and the eurozone since 2007, cited by Michael Heise in “Monetary policy lacks the muscle to boost growth” (August 22), could equally well be taken as evidence of the failure of austerity, since the eurozone at least has pursued austerity in the public finances during that time.

The fall in public investment spending in the eurozone reinforces the point — governments have simply slashed the most discretionary part of the budget to meet targets for spending cuts. Therefore structural reforms, which he claims will “improve productivity and innovation”, cannot be the same thing as fiscal austerity, since a fall in public investment will never boost productivity and innovation.

Bill Smyth

Sunbury-on-Thames, UK

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