2023-12-09 19:41:28
Former British Prime Minister Winston Churchill is credited with saying that democracy is the worst form of government, except for all other forms of government that have been tried from time to time. In the heated debate following the Federal Constitutional Court’s budget policy ruling, one is inclined to claim this wisdom for the debt brake as well: The debt brake is the worst of all fiscal rules, with the exception of all the others that have been tried.
Many economists rightly point out the major shortcoming of the debt brake: the upper limit for structural public debt per year of 0.35 percent of economic output does not differentiate between consumption and investment on the expenditure side. But it would be an even bigger shortcoming if this distinction were built into the debt brake. There are no limits to the inventiveness of politicians to reinterpret consumption into investments in a time of linguistic exaggeration in which even simple redistribution in the welfare state is interpreted as an investment in the cohesion of society. At a time when many public swimming pools are seen as investments, even though it’s about having fun and not about profits through greater productivity.
#Hands #debt #brake