Latvia Proves Virtue of Severe Austerity!


From the front page article in the NYTimes today about how a severe program of austerity has yielded ‘success’ in Latvia, and Paul Krugman’s analysis in his blog, from which the graph was taken:

Now its abrupt turn for the better has put a spotlight on a ticklish question for those who look to orthodox economics for a solution to Europe’s wider economic woes: Instead of obeying any universal laws of economic gravity, do different people respond differently to the same forces?

Latvian businessmen applaud the government’s approach but doubt it would work elsewhere.

Oh dear!  Would that we were all as stoic as the hardy Latvians! Look what we would get for our pains:


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