European Budget Deficits Did Not "Balloon" in the Credit Bubble of the Last Decade

Fox on 15th Street is on the loose again. A Washington Post article on renewed worries over European sovereign debt referred to:

"massive cuts in government spending aimed at reducing deficits that ballooned during the credit bubble of the past decade."

No, the deficits did not balloon during the bubble. Greece and Portugal did run large deficits in the bubble years. However Italy's debt to GDP ratio was falling and the other two crisis countries, Spain and Ireland, were running budget surplu...