December 02, 2011
That must be the case, since if the Post actually knew the history of European debt it would not begin its lead front page story with a sentence like:
“The head of the European Central Bank signaled Thursday that the institution might be willing to take more-aggressive steps to stem the region’s debt crisis, but only if the 17 nations that share the euro unite behind a plan that could tame years of runaway spending.”
Those who have access to data on government debt know that the debt-burdened countries (except Greece) actually had modest budget deficits or even surpluses prior to the collapse of housing bubbles across Europe and in the United States. So there was no pattern of runaway spending that needs to be tamed. There is a severe recession from which Europe needs to recover. If the European Central Bank was more aggressive in promoting growth, with lower interest rates and quantitative easing, it would go far toward addressing the real cause of the deficits in Europe.
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