To spend or not to spend. That is the question dominating the thoughts of economists and politicians across the world as the impact of austerity - or lack of it - on growth rates slowly becomes apparent.
“What I find annoying is the politicians taking John-Maynard Keynes' name in vain,” Pedro de Noronha, the managing partner at Noster Capital told CNBC in an interview on Thursday.
“I am tired of politicians like President Obama and Treasury Secretary Geithner quoting Keynes to justify their spending plans when politicians consistently refuse to listen to Keynes' complete message," he said.
The point has been made before many times. Don’t cut spending in a recession; austerity into a downturn makes things much worse.
In the UK a number of economists are calling on Chancellor George Osborne to consider a plan B to austerity, but for de Noronha this view is self-serving for the politicians who refuse to spend less.
“What Keynes said on not cutting spending in a recession has been widely quoted, correctly,” he said.
“What those quoting him forget though is that Keynes said governments should run a budget surplus in the good times,” said de Noronha.
“Self-serving politicians, eager for re-election will rarely run a surplus in the good times so talking up Keynes' view on how to deal with a recession only gives half the picture. It is just one side of the coin," he said. “This is all about justifying political policy, not about learning the lessons Keynes taught."
Jonathan Portes, the director of the National Institute of Economic and Social Research in the UK wants George Osborne to spread out budget cuts to lessen their impact on growth.
“Growth is below trend, the economy is weak and the Bank of England expects inflationary pressures to ease. It is not just a risk that austerity will hit growth, it already is,” said Portes in an interview with CNBC on Thursday.
“Over the long-term austerity is needed, the question is whether the current pace is needed,” said Portes.
Asked whether governments should be running a surplus in the good times, Portes said it did not help the Irish who ran budget surpluses until the financial crisis hit.
CORRECTION: CNBC wrongly reported that Jonathon Portes was among 52 economists that wrote a letter to the Observer newspaper last week calling on the coalition government to consider a Plan B on economic growth and public spending cuts. While Portes was quoted in the Observer newspaper he was not a signatory to the letter.