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It's less a plan and more the result of a court case, which forced the government to reduce their budget for the next year.

by V__ 3y ago

hnbad 3y ago
That's not the entire truth. The government could abolish (or pause) the "debt brake" or raise taxes, however neither option is acceptable to the so-called liberal party that is effectively acting as the king maker in this coalition (being the smallest partner but also ideologically distant enough to be the most at risk of breaking rank, which they threaten constantly). They also resist any cuts to subsidies for sectors their donors care about (which is why 1/3 the cuts to "climate damaging subsidies" affect agriculture despite only like 10% of those subsidies in total being for agriculture). They would however be perfectly fine cutting social welfare programs, of course, and were happy depleting the budget used to subsidize the "49€ ticket" for public transit (which was based on a test run of a "9€ ticket" and has already been announced to go up in price in the near future). So with the "liberals" preventing tax increases (or resuming the existing wealth tax that was put on hold decades ago), preventing cuts to subsidies to fossils and also preventing any action agains the "debt brake", there's not much the government can do. It's important to note that the "debt brake" is entirely self-imposed and the government can legally suspend it as would be warranted in an economic downturn (which requires investment as austerity is widely known to be ineffective to the point of being self-destructive unless your goal is to just privatize everything and tank the economy further) or during a major crisis (which I believe was the justification for the "special military budget" conjured out of thin air after the invasion of Ukraine or for the temporary suspension during the pandemic). Arguably even the climate catastrophe would qualify if we were taking it more seriously. The entire justification for the "debt brake" was to pay off debt during an economic boom to have more wiggle room during an economic downturn - except that justification completely went out of the window once inflation started going up and now it's just treated as self-justified and not to be questioned.

It's less a plan and more the result of a court case, which forced the government to reduce their budget for the next year.

by V__ 3y ago

It's less a plan and more the result of a court case, which forced the government to reduce their budget for the next year.

hnbad 3y ago

That's not the entire truth. The government could abolish (or pause) the "debt brake" or raise taxes, however neither option is acceptable to the so-called liberal party that is effectively acting as the king maker in this coalition (being the smallest partner but also ideologically distant enough to be the most at risk of breaking rank, which they threaten constantly). They also resist any cuts to subsidies for sectors their donors care about (which is why 1/3 the cuts to "climate damaging subsidies" affect agriculture despite only like 10% of those subsidies in total being for agriculture). They would however be perfectly fine cutting social welfare programs, of course, and were happy depleting the budget used to subsidize the "49€ ticket" for public transit (which was based on a test run of a "9€ ticket" and has already been announced to go up in price in the near future). So with the "liberals" preventing tax increases (or resuming the existing wealth tax that was put on hold decades ago), preventing cuts to subsidies to fossils and also preventing any action agains the "debt brake", there's not much the government can do. It's important to note that the "debt brake" is entirely self-imposed and the government can legally suspend it as would be warranted in an economic downturn (which requires investment as austerity is widely known to be ineffective to the point of being self-destructive unless your goal is to just privatize everything and tank the economy further) or during a major crisis (which I believe was the justification for the "special military budget" conjured out of thin air after the invasion of Ukraine or for the temporary suspension during the pandemic). Arguably even the climate catastrophe would qualify if we were taking it more seriously. The entire justification for the "debt brake" was to pay off debt during an economic boom to have more wiggle room during an economic downturn - except that justification completely went out of the window once inflation started going up and now it's just treated as self-justified and not to be questioned.