A lesson in economics: Latvia succeeds where Greece and Obama have failed

Like the rest of the world, Latvia suffered under the economic collapse of 2008. Unlike much of the world, however, it responded by cutting back on the dead weight of government. The Latvian government, for example, "laid off a third of its civil servants."   The result was an economic boom. The NY Times reports:

Hardship has long been common here — and still is. But in just four years, the country has gone from the European Union’s worst economic disaster zone to a model of what the International Monetary Fund hails as the healing properties of deep budget cuts. Latvia’s economy, after shriveling by more than 20 percent from its peak, grew by about 5 percent last year, making it the best performer in the 27-nation European Union. Its budget deficit is down sharply and exports are soaring. 

“We are here to celebrate your achievements,” Christine Lagarde, the chief of the International Monetary Fund, told a conference in Riga, the capital, this past summer.

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