The boys and girls at Fox on 15th Street are really getting excited over their hopes that the European welfare state might be dismantled. The third of paragraph of the lead front page article told readers:
"If adopted by other nations in the union, the deal would mean drastic cuts in European budgets. It would also spell the end of three decades of overspending that helped finance a cozy social protection system envied by much of the world."
Of course the most generous welfare states who have the most "cozy" social protection systems are not facing fiscal crises. These are countries like Sweden and Denmark and even Germany, all of whom have relatively solid finances. Paul Krugman put up a nice graph on his blog yesterday showing the non-relationship between the share of government spending in GDP and the current interest rates paid by government.
Also, as people familiar with current events know, this crisis did not stem from "three decades of overspending," it came about because of a collapse of housing bubbles in the United States and across Europe. This is the opposite of a problem of an excessive welfare state. It was a problem of a private financial sector gone wild making the reckless loans that fueled the bubble. Apparently the Post has not heard about this.
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