The US criticism of Germany’s economic policy is correct

Today’s commentary
Summary: The U.S. Treasury’s semi-annual currency report had surprisingly strong criticism for Germany. The U.S. claims that Germany’s macroeconomic policies are inherently deflationary, creating risk for further crisis. I agree with this criticism and I will explain why it is valid here.
Here is the part of the report on Europe that everyone is talking about (pdf here). I have added underlining on the key bits for emphasis:

Euro area deficit countries have sharply reduced their current account deficits, but euro area surplus countries have not reduced their current account surpluses. The euro area's overall current account swung into surplus in 2012, and the surplus has increased further in the first half of 2013 to almost 2. 3 percent of GDP. The Netherlands and G...

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