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Home Publications Blogs Beat the Press The NYT Says Denmark and Bill Gates are Both Like Greece

The NYT Says Denmark and Bill Gates are Both Like Greece

Friday, 16 September 2011 12:19

The NYT has lost any connection to reality in its deficit/debt discussions. In an article discussing the victory of the left parties in Denmark it told readers:

"For Denmark, a nation of 5.5 million people, the election turned on the issue that has also divided many other Western nations struggling with low growth, large government deficits and historic levels of national debt: what mix of government spending and tax policies to adopt in order to restore economic health and avoid slipping further toward a crisis like Greece’s."


According to the IMF, Denmark's debt to GDP ratio is projected to be just over 4 percent at the end of 2011. By comparison, Greece's debt to GDP ratio is 150 percent. Greece's annual interest burden is considerably larger than Denmark's debt.

Claiming that Denmark need worry about being like Greece is like saying that Bill Gates needs to worry about ending up homeless. Both are theoretically possible, but almost unimaginable given their current situations.

The article also includes an unusual discussion of growth rates telling readers:

"Denmark is Scandinavia’s worst-performing economy, with a growth rate less than half of Norway’s and less than one-third of Sweden’s."

Since the growth rates in question are all low, it makes far more sense to express the gap in percentage point terms rather than as ratios. A country with 1.0 percent growth has twice the growth rate of a country with 0.5 percent, but for most purposes there is little difference between these growth rates in the lives of the populations affected.

Comments (9)Add Comment
Chomsky propanda model in action
written by Bill Turner, September 16, 2011 1:40
Even though I known about the model for many years, I am still often startled how often it is seen in play. This is a clear example. Thanks, Dean, for the good work.
written by PeonInChief, September 16, 2011 3:09
I'm not expert, or even particularly knowledgeable, about the politics of Denmark, but I don't have to be to know that the NYT is probably trying to argue that irresponsible people always vote in those profligate lefties when they don't want to suffer the austerity that builds character and punishes the spendhappy masses for the error of their ways.
written by Kat, September 16, 2011 4:41
Indeed! This is the case. Then you can scan your eyes downward and to the right to read "...what you get for $925,000".
written by Merijn Knibbe, September 16, 2011 6:32
Sweden did not have a low growth rate in 2010. It had the highest growth rate of all rich European economies. General government debt as a % of GDP was 43,6% in 2010, according to Eurostat. The Danish economy does bad, as it's currency is overvaluated and they want to manintain their Europeg. Job declines are comparable with those of the austeristians. See http://rwer.wordpress.com/2011...jobs-jobs/
written by Joe, September 16, 2011 7:59
Doesn't Denmark have it's own currency? So therefore, it can't end up like Greece. Bill Gates doesn't issue his own currency, so he could end up like Greece.
written by urban legend, September 17, 2011 1:47
And really, why should we care about GDP growth comparisons when Sweden's unemployment rate is 6.6% (the highest of the three countries), Denmark's is 4.1% and Norway's is 2.8%?
written by skeptonomist, September 17, 2011 9:48
Denmark's debt/GDP was about 44% (not 4%)in 2010 and its deficit was 2.7%. Neither is alarming and could hardly have been the major issue in an election. The result, according to the article itself, was a rejection of the conservatives and vote for expansion of welfare-state policies. This is actually fairly significant as possibly indicating popular rejection of current conservative EU economic policies. The paragraph talking about debt is bizarre and the piece is rather incoherent - immigration doesn't seem to have been important either. Maybe the Times or somebody will have a better article about European elections.
written by Morten Hansen, September 19, 2011 6:33
As skeptonomist writes, Denmark's debt to GDP is certainly not 4% but rather (though a still quite easily manageable) 44%.

Denmark is certainly not Greece but the issue has been whether to confront the current troubles with more government spending and thus higher deficits or impose austerity measures.

An argument for austerity in DK that is very different from the arguments and counterarguments in Greece, USA, UK etc is that Denmark already has the biggest public sector in the world as measured by public expenditure to GDP (close to 60%).
written by Merijn Knibbe, September 19, 2011 1:21
An argument for Denmark to devaluate its currency is that Sweden, which has devaluated, does quite well when we look at unemployment and growth (not just better than average in the EU, but better than everybody else, in fact). And it has a government surplus.

Denmark, did not want to devaluate despite having the highest price level of the entire EU, paid for this fatefull decision with a shrinking economy, less jobs, less production and the like. By trying to protect the value of money - it diminished the value of income.

Sweden pursued 'demand oriented policies'. Smart. Denmark didn't. Stupid.


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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.