So Greece has officially defaulted on its debt to private lenders. It was an “orderly” default, negotiated rather than simply announced, which I guess is a good thing. Still, the story is far from over. Even with this debt relief, Greece — like other European nations forced to impose austerity in a depressed economy — seems doomed to many more years of suffering.

And that’s a tale that needs telling. For the past two years, the Greek story has, as one recent paper on economic policy put it, been “interpreted as a parable of the risks of fiscal profligacy.” Not a day goes by without some politician or pundit intoning, with the air of a man conveying great wisdom, that we must slash government spending right away or find ourselves turning into Greece, Greece I tell you.

Just to take one recent example, when Mitch Daniels, the governor of Indiana, delivered the Republican reply to the State of the Union address, he insisted that “we’re only a short distance behind Greece, Spain and other European countries now facing economic catastrophe.” By the way, apparently nobody told him that Spain had low government debt and a budget surplus on the eve of the crisis; it’s in trouble thanks to private-sector, not public-sector, excess.

But what Greek experience actually shows is that while running deficits in good times can get you in trouble — which is indeed the story for Greece, although not for Spain — trying to eliminate deficits once you’re already in trouble is a recipe for depression.