June 03, 2012
The Washington Post still can’t figure out who is on first in the euro crisis. It once again referred to debt-troubled countries as “profligate.” Of course, the debt-burdened countries were not especially profligate. Italy’s debt to GDP ratio had been falling before the crisis. Ireland and Spain had large budget surpluses. So the issue is not these countries were profligate, the issue is that these countries got hit badly by the collapse of housing bubbles across Europe.
This piece also misrepresents German unemployment, telling readers that it is 6.7 percent. This is the official German rate. This rate includes people who are working part-time as unemployed. The OECD harmonized unemployment rate for Germany, which is calculated using methodology comparable to the U.S. methodology, is 5.6 percent.
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