The editorial board of my hometown paper, the St. Louis Post-Dispatch, is not known for being particularly astute when it comes to economics. In fact, I think it's fair to say that they have a bit of a reputation for letting blatant partisanship get in the way of sensible analysis. Today they have an editorial that should cement their reputation. The editorial purports to be about the European crisis, but it is really a tool for taking a phony dig at the GOP.
As for their knowledge of basic facts, look no further than their absolute howler about the European Union: "It worked pretty well as economies expanded, but the world financial
crisis of 2008 exposed a significant flaw: There was a common currency
but no central bank." Well, I hate to break it to them, but there is a European central bank. It is called the European Central Bank. Does anyone there know how to use Google?
They then claim that "the GOP is convinced that pure austerity is the way to growth." According to the Merriam-Webster Dictionary, austerity is "enforced or extreme economy." The Ryan plan, which is the de facto GOP plan, has government spending as a share of GDP rising from 21.6 percent in 2012 to 24 percent in 2032. If that is pure austerity, then I am curious to know what the P-D editors think is regular austerity. Thirty percent of GDP? Maybe 40 percent? You might not like the Ryan plan, and the Bowles-Simpson plan has its sensible supporters. But austerity is just not one of the options that we face, although we will face it in the future if we fail to establish some fiscal sanity today.