Something to keep in mind when you read stories about the “success” the Irish or Baltic countries are having with austerity and internal deflation, is that by the standard generally claimed here (GDP fell, then stopped falling, then started rising again) we had a huge success with Keynesian stimulus in the USA:
Now since Americans live in America, it’s hard for Americans to focus on that chart and not notice that actually the economy is terrible. Tons of people are unemployed, recent graduates can’t find jobs, and lots of people in their 40s and 50s have taken huge negative hits to their savings. But it’s right there on the chart. Output didn’t tumble and then keep tumbling. Output didn’t even tumble and then stagnate. Output tumbled and then — especially during the ARRA era when we were actually stimulating — it rose again. If this counts as success in Ireland or Latvia, then it’s success here too. I wouldn’t call any of it success, but you need to score these things consistently.