Austerity needs to be implemented properly; ideally while not stifling the respective economy. The concept of austerity has not been honestly applied yet by any government save perhaps Iceland IMHO. True austerity, again in my opinion, should be a mix of expense management while stimulating growth in sectors that will ultimately help the economy grow. Stimulating growth in the entitlement sectors won't save any economy' it will just kick the can down the road. Yes, inflation is not a "current problem" but the actions that some governments are considering right now will most certainly inflate their economies which will in turn generate even worse problems than we are facing now. Keynesian economics did not take into account "modern economies" issuing debt up the yin yang to spend like crazy without consideration of how they can ever pay it back. I am sure you can see now that that cycle is about to end in an ugly way. With the most recent action by the Argentine government in regards to Repsol/YPF and the 20% of Greece's new government being Nazi and Communist, currency depreciation, inflation and debt default are now more likely. Gee those economies don't have any sovereign debt out there coming due do they?