4 ms·

As a half English, half German who's had a fair bit of professional contact with the US, I'd argue the main difference between the US and Germany is short term

by harryf 14y ago

As a half English, half German who's had a fair bit of professional contact with the US, I'd argue the main difference between the US and Germany is short term vs. long term thinking The US is brilliant at the short term, as characterized by it's sales culture; the mentality of sell first, build second is extremely effective in allowing some forms of innovation, capturing market share fast and eliminating certain forms of waste. This of course was traditionally offset by attracting talent worldwide, such as academics and engineers, to immigrate to the US By contrast Germans are famous for their engineering. It's much more a build first, sell second approach that's characterized by long term thinking and planning. Socially that's also reflected education where everyone has a chance, irrespective of your parents income - having a well educated populace is a huge asset and that's seen as a long term investment. All that said, Germany's economy may be less wonderful than it seems. While the US seems to solve any economic issues by "printing money", Germany props themselves up with exports - that a country of just 80 million people is the world's 3rd largest exporter ( http://en.wikipedia.org/wiki/List_of_countries_by_exports http://en.wikipedia.org/wiki/List_of_countries_by_exports ) is kinda... strange and makes we wonder if something doesn't quite add up? Having worked for a couple of years in Germany, one thing that struck me is taxes came to almost 50% of my salary. Another impression was my generation in Germany - currently in their 30's - wasn't very motivated toward their own careers. That might not entirely be a bad thing - less of a rat race - but it comes across as a generation that doesn't really know what it's purpose is. So I have a kind of gut feeling that the German focus on exports is done at the cost of "self neglect".

jsilence 14y ago
"Socially that's also reflected education where everyone has a chance, irrespective of you parents income" Unfortunately exactly the opposite is true.
- fberger 14y ago
  Can you be more precise what you're referring to? Germany's lower school system of deciding at age 10 whether you go to a school (Gymnasium) that allows you go to college later or not is definitely a big issue. But when I went to college in Germany 10 years ago in my hometown, the cost was minimal (< 300 Euros per semester including unlimited public transport). Also there are regulated student loans (Bafoeg) that less affluent students can take advantage of.
  - harryf 14y ago
    Would also be interested in hearing more. Looking at http://en.wikipedia.org/wiki/Education_in_Germany#Tuition_fees http://en.wikipedia.org/wiki/Education_in_Germany#Tuition_fe... for example - depending on where you live it seems you might have to pay tuition fees but how much exactly?
    - Arvodan 14y ago
      It highly depends in which state (Bundesland) you live. The most states have don't have those fees anymore, only 3 of 16 states have them as far as I know. The height of those fees is about 500 € per half-year. Independent to those fees (which are called Studiengebühr) there are other fees which have to be paid in all universities: It is called "Semesterbeitrag" and is about 150 € per half-year (average guessed on my experience ;-) ). It is used to pay public-transport and such stuff.
    - maigret 14y ago
      The fact is that the school is divided very early in way where you are going to college and others where you'll just learn a more simple job (mechanics, cook...). So at a young age, teachers decide where you are going to go. Studies show that this is very dependant on the social class of your parents. Teacher almost never send a surgeon's son to a no-college school. So social mobility is prevented that way, instead of letting the children decide when they are around 18 and more aware of their own capacities and wishes. Having your life determined at 10 is quite harsh. Then, there is the fact that school is over at around 2PM, letting the afternoon to either slack off or learn piano and classical dance, and do homework. That works only well for families which are well educated, poor and immigrant families don't really know what to begin with.
  - rmk2 14y ago
    The point is that if you come from a low income background, there is a very good chance you will never make it to university, because you will probably never quite make it to gymnasium (or through it) to begin with. For those who speak German: http://www.sueddeutsche.de/karriere/uebertritt-aufs-gymnasium-mit-leistungsdruck-in-die-elite-1.20206 http://www.sueddeutsche.de/karriere/uebertritt-aufs-gymnasiu... (süddeutsche.de) https://de.wikipedia.org/wiki/Bildungsbenachteiligung_in_der_Bundesrepublik_Deutschland https://de.wikipedia.org/wiki/Bildungsbenachteiligung_in_der... (de.wikipedia.org) http://www.zeit.de/2010/06/C-Uebergang http://www.zeit.de/2010/06/C-Uebergang (zeit.de) In English: https://en.wikipedia.org/wiki/Education_in_Germany#Determinants_of_academic_attainment https://en.wikipedia.org/wiki/Education_in_Germany#Determina... (en.wikipedia.org)
saalweachter 14y ago
Taxes in the US aren't as low as some are inclined to believe (or as high as others--). As a programmer renting in NYC with a big salary and no investment income, Federal, State, and NYC taxes come to about 44%-46% of my income -- maybe 42%-44% since I tend to get a refund. Once you add in health care costs (both employee and employer contributions), it's probably pretty darn close to 50%.
- mbesto 14y ago
  I've always argued this about NYC compared to the EU. Taxes hit you hard living. But as many people would guess, NYC is filled with bankers with deep pockets and thus the means to skirt around the tax rate.
- _delirium 14y ago
  Individual tax rates can vary considerably, but overall taxation is only about 2/3 as high in the US as in Germany, counting all taxes and sources. Germany's tax revenue is about 41% of the country's GDP, while all levels of U.S. government have tax revenue adding to only 27%: http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenu... (on Wikipedia but just reproducing a Heritage Foundation data set). My own tax rates when I lived in the U.S. were hilariously low, but then I didn't make a lot of money either, and lived in Texas for part of the time. A household making even $200k pays only 24% in federal taxes if filing singly, or 19% if filing jointly, and that's assuming they take nothing but the standard deduction and none of it is capital gains, so it's quite possible for that to be even lower. I do agree it's important to compare like-to-like. For example, my Danish taxes now are still higher than my US taxes would be for the same income, but not as much higher once you take into account that in the US I'd have to buy health insurance separately.
cschwarm 14y ago
> Having worked for a couple of years in Germany, one thing that struck me is taxes came to almost 50% of my salary. Are you sure, you didn't mean statutory deductions? Contributions to health, unemployment, and annuity insurance are no taxes.
- harryf 14y ago
  That's correct - should have been clearer - was keeping it short. By "taxes" I mean all compulsory payments I was required to make, including health, unemployment etc.
nathan_long 14y ago
>> Germany props themselves up with exports I don't understand what you mean. Why is this different from saying "the shop owner props herself up by selling to other people in town?", only at an international level? In other words, why is it a bad thing?
- lmm 14y ago
  Because it seems unsustainable. Sooner or later international trade has to reach an equilibrium where everyone exports as much as they import (just as everyone in town must ultimately sell the same amount of value as they buy). Obviously someone who's buying more than they're selling has a problem, since sooner or later they'll run out. But someone who's selling more than they're buying should not expect this to go on forever either, and if their internal economy depends on a constant influx of money from outside then there will be trouble when it stops. To stretch the analogy to its limits, a shopkeeper who's got in the habit of having the extra money on hand from being able to sell more than they buy in the market is living dangerously. (More specifically for Germany I'd say there's a risk of a deflationary spiral - if exports fall then companies will reduce domestic prices and take losses (leading to reduced pay in real terms). Consumers see that prices and salaries are falling, so they hold onto their money and spend less, which only makes it worse). But you're right in that it's not so much having high exports that's a problem, as the risk of seeing a sudden drop in your exports.
  - nathan_long 14y ago
    >> international trade has to reach an equilibrium where everyone exports as much as they import (just as everyone in town must ultimately sell the same amount of value as they buy) I'm not sure that must or will happen. Maybe the US will decline as a German customer, but India will step up, for example. Germany might be able to go on relying on exports for ever. And a wise shopkeeper brings in more than they earn for decades, saving up for when their is no income (hard times or retirement). Dependance on exports makes Germany vulnerable to worldwide financial changes, but dependance on domestic sales makes them vulnerable to domestic crises, like a falling birth rate. Pick your poison. I'm not sure the choice is very clear. Although maybe the answer is "spread your risks by having a balance," which I suppose was your original point.

by harryf 14y ago

jsilence 14y ago

"Socially that's also reflected education where everyone has a chance, irrespective of you parents income" Unfortunately exactly the opposite is true.

fberger 14y ago
Can you be more precise what you're referring to? Germany's lower school system of deciding at age 10 whether you go to a school (Gymnasium) that allows you go to college later or not is definitely a big issue. But when I went to college in Germany 10 years ago in my hometown, the cost was minimal (< 300 Euros per semester including unlimited public transport). Also there are regulated student loans (Bafoeg) that less affluent students can take advantage of.
- harryf 14y ago
  Would also be interested in hearing more. Looking at http://en.wikipedia.org/wiki/Education_in_Germany#Tuition_fees http://en.wikipedia.org/wiki/Education_in_Germany#Tuition_fe... for example - depending on where you live it seems you might have to pay tuition fees but how much exactly?
  - Arvodan 14y ago
    It highly depends in which state (Bundesland) you live. The most states have don't have those fees anymore, only 3 of 16 states have them as far as I know. The height of those fees is about 500 € per half-year. Independent to those fees (which are called Studiengebühr) there are other fees which have to be paid in all universities: It is called "Semesterbeitrag" and is about 150 € per half-year (average guessed on my experience ;-) ). It is used to pay public-transport and such stuff.
  - maigret 14y ago
    The fact is that the school is divided very early in way where you are going to college and others where you'll just learn a more simple job (mechanics, cook...). So at a young age, teachers decide where you are going to go. Studies show that this is very dependant on the social class of your parents. Teacher almost never send a surgeon's son to a no-college school. So social mobility is prevented that way, instead of letting the children decide when they are around 18 and more aware of their own capacities and wishes. Having your life determined at 10 is quite harsh. Then, there is the fact that school is over at around 2PM, letting the afternoon to either slack off or learn piano and classical dance, and do homework. That works only well for families which are well educated, poor and immigrant families don't really know what to begin with.
- rmk2 14y ago
  The point is that if you come from a low income background, there is a very good chance you will never make it to university, because you will probably never quite make it to gymnasium (or through it) to begin with. For those who speak German: http://www.sueddeutsche.de/karriere/uebertritt-aufs-gymnasium-mit-leistungsdruck-in-die-elite-1.20206 http://www.sueddeutsche.de/karriere/uebertritt-aufs-gymnasiu... (süddeutsche.de) https://de.wikipedia.org/wiki/Bildungsbenachteiligung_in_der_Bundesrepublik_Deutschland https://de.wikipedia.org/wiki/Bildungsbenachteiligung_in_der... (de.wikipedia.org) http://www.zeit.de/2010/06/C-Uebergang http://www.zeit.de/2010/06/C-Uebergang (zeit.de) In English: https://en.wikipedia.org/wiki/Education_in_Germany#Determinants_of_academic_attainment https://en.wikipedia.org/wiki/Education_in_Germany#Determina... (en.wikipedia.org)

saalweachter 14y ago

Taxes in the US aren't as low as some are inclined to believe (or as high as others--). As a programmer renting in NYC with a big salary and no investment income, Federal, State, and NYC taxes come to about 44%-46% of my income -- maybe 42%-44% since I tend to get a refund. Once you add in health care costs (both employee and employer contributions), it's probably pretty darn close to 50%.

mbesto 14y ago
I've always argued this about NYC compared to the EU. Taxes hit you hard living. But as many people would guess, NYC is filled with bankers with deep pockets and thus the means to skirt around the tax rate.
_delirium 14y ago
Individual tax rates can vary considerably, but overall taxation is only about 2/3 as high in the US as in Germany, counting all taxes and sources. Germany's tax revenue is about 41% of the country's GDP, while all levels of U.S. government have tax revenue adding to only 27%: http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenu... (on Wikipedia but just reproducing a Heritage Foundation data set). My own tax rates when I lived in the U.S. were hilariously low, but then I didn't make a lot of money either, and lived in Texas for part of the time. A household making even $200k pays only 24% in federal taxes if filing singly, or 19% if filing jointly, and that's assuming they take nothing but the standard deduction and none of it is capital gains, so it's quite possible for that to be even lower. I do agree it's important to compare like-to-like. For example, my Danish taxes now are still higher than my US taxes would be for the same income, but not as much higher once you take into account that in the US I'd have to buy health insurance separately.

cschwarm 14y ago

> Having worked for a couple of years in Germany, one thing that struck me is taxes came to almost 50% of my salary. Are you sure, you didn't mean statutory deductions? Contributions to health, unemployment, and annuity insurance are no taxes.

harryf 14y ago
That's correct - should have been clearer - was keeping it short. By "taxes" I mean all compulsory payments I was required to make, including health, unemployment etc.

nathan_long 14y ago

>> Germany props themselves up with exports I don't understand what you mean. Why is this different from saying "the shop owner props herself up by selling to other people in town?", only at an international level? In other words, why is it a bad thing?

lmm 14y ago
Because it seems unsustainable. Sooner or later international trade has to reach an equilibrium where everyone exports as much as they import (just as everyone in town must ultimately sell the same amount of value as they buy). Obviously someone who's buying more than they're selling has a problem, since sooner or later they'll run out. But someone who's selling more than they're buying should not expect this to go on forever either, and if their internal economy depends on a constant influx of money from outside then there will be trouble when it stops. To stretch the analogy to its limits, a shopkeeper who's got in the habit of having the extra money on hand from being able to sell more than they buy in the market is living dangerously. (More specifically for Germany I'd say there's a risk of a deflationary spiral - if exports fall then companies will reduce domestic prices and take losses (leading to reduced pay in real terms). Consumers see that prices and salaries are falling, so they hold onto their money and spend less, which only makes it worse). But you're right in that it's not so much having high exports that's a problem, as the risk of seeing a sudden drop in your exports.
- nathan_long 14y ago
  >> international trade has to reach an equilibrium where everyone exports as much as they import (just as everyone in town must ultimately sell the same amount of value as they buy) I'm not sure that must or will happen. Maybe the US will decline as a German customer, but India will step up, for example. Germany might be able to go on relying on exports for ever. And a wise shopkeeper brings in more than they earn for decades, saving up for when their is no income (hard times or retirement). Dependance on exports makes Germany vulnerable to worldwide financial changes, but dependance on domestic sales makes them vulnerable to domestic crises, like a falling birth rate. Pick your poison. I'm not sure the choice is very clear. Although maybe the answer is "spread your risks by having a balance," which I suppose was your original point.