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Mises's solution follows logically from his warnings. You can't fix what's broken by breaking it yet again. Stop the credit gavage. Stop inflating. Don't encourage consumption, but rather encourage saving and the repayment of debt. Let all the lame businesses fail—no bailouts. (You see where I'm going with this.) The distortions must be removed or else the precipice from which the system will inevitably fall will simply grow higher and higher.

The Fed didn't inflate enough, according to Friedman. The Great Depression was a Deflationary Depression.

What's the Austrian counter to that claim?

The Fed didn't inflate enough, according to Friedman. The Great Depression was a Deflationary Depression.

What's the Austrian counter to that claim?

The Austrians believe that it was the voluminous interventions of Hoover and FDR that prolonged the great depression. The tripling of taxes, the enormous increase in regulations, the vast new social programs put in place to help the unemployed, the propping up of industries and wages that prevented the liquidation of the boom malinvestments, etc...

In other words the depression of the late 20's early 30's became "great" due to various boneheaded government policies put in place to try to fix the economy - policies similar to the interventions taking place today on a grander scale.

Austrians today believe that while Bernanke's money pump stopped the bleeding it's done nothing to heal the patient. That the patient is still sick, perhaps sicker, than before. That we now have a rash of zombie "too bigs" who should have failed and we've added substantial new moral hazard into the mix going forward. That the reset that needs to take place to put us on a solid path hasn't happened.