I should of thought of this during my previous post on “liquidationism,” but Greece might be the best example of Austrian Economics recovery policies in action.
Greece has hard money in the form of Euros that it cannot inflate, it’s government has been forced to decrease spending, and the government has allowed massive amounts of companies to fail.
So how is that working out for the Greeks? Fortunately the New York Times recently wrote on how the Greek Economy is performing under the Austrian prescriptions of austerity:
The Greek economy posted its 20th consecutive quarterly decline in the three months through June, government data showed on Monday, but a slower pace of contraction provided a glimmer of hope for beleaguered Greeks.
Gross domestic product shrank by 4.6 percent in the second quarter compared with the same three months a year earlier, the official Hellenic Statistical Authority said. That was an improvement from the first quarter of 2013, when the economy contracted 5.6 percent compared with a year earlier.
The horrific results austerity on the Greek economy would not be complete without a look at the unemployment rate.
The results speak for themselves: “liquidationism” and austerity are not policies that should be considered for reversing a recession.