This is an excellent article looking at good, bad and ugly deleveraging experiences over the last century. It is written by Ray Dalio, billionaire, head of the World’s largest hedge fund operator, Bridewater Associates. I STRONGLY RECOMMEND this article for a deeper understanding of the deleveraging debate underpinning the argument of the austerian politicians in the US, the UK and Germany.
The article is quite long but easy to read with lots of interesting colored charts.
Based on historic precedent, I think that there is hard evidence that austerity has been too severe in many countries since the financial collapse in 2008, especially in the UK and Southern Europe.
Good national economic house-keeping as advocated by Germany makes excellent sense but as this article explains there are different rates of pain associated with different deleveraging strategies; also and most critically because of the Euro and the European Commission, Southern European countries do not have a full range of economic policy tools, both in terms of fiscal and monetary policy.