July 24, 2012
It must be very hard to get news at Fox on 15th Street. In the Post’s little primer giving “steps of the euro crisis” step number 3 tells us about the end of cheap credit:
“Following the U.S. credit crisis in 2008, Greece reported a huge deficit increase that suddenly made investors worried about its ability to pay back its loans. High deficits in Portugal, Spain and Ireland caused the price of credit to rise in those countries as well.”
This is an interesting story, but it left out an important part of the picture. Spain and Ireland had been running large budget surpluses prior to the downturn. They were running large deficits in 2008 because they had housing bubbles that collapsed and sent their economies plummeting into recession.
Apparently the Post could not find information about these bubbles or the path of government finances in euro zone countries prior to the downturn.
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