By now, you have to be dead (or German, or Jeb Bush) to have not figured out what a hash austerity has made of Greece.
Since the European Union and the International Monetary Fund made Greece begin raising taxes, cutting spending and balancing its budget amid the worst recession in 80 years beginning in 2010, the Hellenic economy has turned hellish indeed:
Unemployment has almost tripled to 25.6%, and the economy has shrunk 29% to $241.7 billion last year (and falling).
And, oh yes, they’re broke. Greek banks are shut and the government missed a measly 1.6 billion euro debt payment this week, setting up a referendum on
Sunday on whether to raise taxes even more and cut spending even more to mollify creditors. As Germany, naturally, demands.
And here’s the rub: America almost did a version of the same thing.
Why America is not where Greece is — despite a persistent effort by self-styled U.S. deficit hawks to paint it as the next Greece — is partly about our economy’s size and the central role the Federal Reserve and U.S. dollar play in the world. But it’s also about policy: In 2009, 2011 and 2013, America faced decisions about taxes and spending that could have made our performance, if not Greece-bad, a lot worse than it was.