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The country is in the debt-trap – Politicians advocate more expenditures
The officially recorded debt of Federal-, State- and Municipal institutions are 1400 Billion EUROS. The Federal Government pays 100 million EUROS per day in interest. Germany sits tightly in a trap of debt. Arithmetically every German, from the oldest to the youngest citizen carries a debt of EURO 17.500.-. However, the politicians talk about new expenditures for the well –being. All this without even considering the fact, that the concealed debt which the Government has heaped on its Social- and Health systems are not even included in the above figures. This debt, depending on which mode of calculation is applied, come to another 6-8 Billion EURO.
Science and the Majority of the People see the country in a crisis – future Generations without space to breathe.
Out of the 254 Billion Federal Budget 39 Billion will have to be spent on interest alone. The federal debt sucks off an ever increasing share of the economic strength and will deprive future generations of room to develop themselves.
This situation has caused 241 professors of economy to appeal to the politically responsible. In the “ Hamburg Appeal” they request the politicians of all parties to no longer snow the public and to totally refrain from making uncovered promises.
The Munich IFO Institute whose president Professor Hans-Werner Sinn is also a signee of the appeal, has calculated that the debt load is equal to 2/3 of the productivity of the total economy. Also if the trend remained unchanged for two more generations, Germany’s rating would come down to that of some Latin American countries.
Remarks on the Insolvency of a country
German purchasers of Argentine Government Bonds know the horrible scenario of a country going bankrupt. Bonds falling due, are refinanced with dramatic drops in value e.g. by new debts and the holder of such bonds can only watch his partial expropriation.
Summary of the 11 Theses of the “ Hamburg Appeal”
- Governmental interference in the free economy prevents the unfolding of possibilities.
- A Government cannot and should not exercise control over everything. The main reason for demand are outside of its economical-political influence and therefore require rather less than more direction.
- Wages must go down. Germany cannot be a high wage country as long as other locations for the industry remain the only way to overcome the weakness of the German economic growth.
- The requests directed at the social systems must be reduced to incentives in the form of Government aid.
- Class warfare rhetoric is damaging to the German investment climate as much as high labor cost and high tax loads are.
- Citizens and companies agree that the high debt of the country is much more dangerous than politics directed at only one or several legislative periods. They become continuously more reluctant in their purchase decisions, especially if problems are not solved but only transferred onto future generations.
- Severe cuts in all areas of public spending is indispensable for a consolidation of the country’s finances.
- A higher value has to be placed on diligence, quest for knowledge and performance in aid of the “location” Germany.
- The research in new technologies – which increasingly is leaving Germany, must no longer be hampered by rigid federal and state rules and regulations.
- Chances for an economic development of Germany, promulgated by increasing pressure of competition and globalisation have to be actively used.
- The discussion should not be lead one sided. Variety and low price products in a positive surrounding contribute to the standard of living.
For complete documentation of the “Hamburg Appeal” in german klick here |
