>> What we are seeing is the predictable result of the classic monetary models
Respectfully, models that are known to be wrong, as all models are - they are models after all.
Austerity - where has that ever worked? Post-war Germany and... ??? I mean it's constantly tried everywhere (Greece is a good recent example of its futility). Classic monetary models clearly predict it should work, we've tried it hundreds of times in different countries over the past ~100 years, and it's worked once. Maybe we just need to try extra super duper hard the next time?
My skepticism rises when i hear people confidently proclaim their economoic model predicts anything at the macro level. What we're seeing is a lazy attempt to ignore the models are not useful. If prices stay low for 5 more years than the models predict then we are told by the over-confident types that we should just wait a little longer to see the effect but they're coming. If prices go up then "AHA! Justified, i told you so". Prices can ONLY go down, up or stay the same - if you wait long enough of course they go up!
There's a big wooly gap between alleged cause and effect that we're just supposed to not question when people confidently tell us their model predicted the outcome.