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As the US economy’s woes mount and Europe’s political debate heats up, the German media has once again provided a dose of reality for Americans that often appears surreal.

To illustrate how absurd US media criticism of Germany is, The New York Times and The Washington Post today reported on the German government’s efforts to keep its budget deficit under control. “Germany has to live on its own money,” a government official told the Washington Post, “which means its people can spend it their way.”

But German officials disagree.

“The point is that we’re trying to keep deficits within the limits allowed by the market,” said Hans-Otto Hohmann, who heads the German office of the International Monetary Fund and has worked on the German government’s budget woes for more than 30 years.
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The Washington Post is correct on the fact that the government maintains a budget deficit. The fact that the government’s budget deficit is a large figure – $39.3 billion in 2010 with an additional $8 billion in 2012 to keep it within EU limits in the second half of the year – does not detract from the German government’s attempts to keep such deficits “within the limits allowed by the market.”

According to its website, the E.U.-wide budget deficit for 2010 was pegged at 3.1 per cent of gross domestic product (GDP). The E.U.-wide budget deficit for 2012 was pegged at 0.6 per cent and for 2013 it will be 3.2 per cent.

While the US government has a larger budget deficit, the amount of money the US government borrows is much smaller than that in Germany.

According to its website, the US is the country with the biggest budget deficit of any major industrialized country. The largest deficit since the beginning of 2008 has been reported in France (estimated at 3.8 per cent in 2012, although the total figure will likely be higher due to some reporting discrepancies) while it is the second largest deficit reported in Italy (estimated at 1.5 per cent).

The New York Times and the Washington Post’s report that Germany has to live on its own money is correct. When the German economy plunged into a recession in mid-2010, the country had to borrow heavily in order to keep its deficit under control. To keep GDP out of negative territory in

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