AP Touts Stimulus in German Recovery, Ignores Tax Cuts

If it worked for Germany, it should work for the United States, right?

In a July 21 story, AP writer Geir Moulson praised government stimulus for helping Germany “bounce back” from the recession. Moulson highlighted two government stimulus packages totaling $104 billion and a government-sponsored program that cut back workers’ hours instead of laying them off as reasons for Germany’s endurance:

“The various government measures are all part of the upswing.”

However, nowhere in Moulson’s 25-paragraph story did he acknowledge tax cuts over the past decade as a reason for Germany’s success. As reported in Deutsche Welle, a German media outlet, the European Union’s statistical office indicated Germany’s corporate tax rate was cut to 29.8 percent in 2010, a 42-percent decrease from the 51.6-percent rate in 2000. Germany has also cut income taxes by 3.6 percent over the past ten years.

Moulson did acknowledge Germany’s role in the world economy as a factor, but for the most part, he took every opportunity to praise the government stimulus:

“The main driving force for Germany, a major exporter, remains the growing world economy, the Bundesbank said. Still, there's general agreement that the way to recovery was paved in part by government spending.”

The AP story is only the latest example of media outlets championing government stimulus packages as a solution to economy woes while downplaying the benefits of tax cuts and other conservative solutions.

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