Home » “Anyone who weakens the debt brake now is digging its grave.”

“Anyone who weakens the debt brake now is digging its grave.”

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“Anyone who weakens the debt brake now is digging its grave.”

Many investments, such as the renovation of roads and bridges, are also in the interests of future generations. Isn’t it appropriate to include them in the financing costs?
Our children and grandchildren are already facing a high burden due to demographic developments. They must help finance the demands of the aging baby boomer generation through the federal budget, pensions, health and nursing care insurance. If we now take on even more debt, the burden will escalate. The days of zero and negative interest rates are over. This year alone, interest expenses in the federal budget amount to around 40 billion euros. If the low-interest bonds issued in recent years are soon replaced by higher-interest bonds, interest expenses will continue to rise. This limits the financial freedom of action of future generations. The money is then missing for other important government tasks. Easing the debt brake will further increase this effect.
Compared to other countries, Germany has so far held back when it comes to taking on debt.
That is a good thing. Look at the development of the past few years. In late summer 2019, when interest rates were extremely low, some colleagues suggested abolishing the debt brake and then taking on a lot of debt. Their argument was that interest rates below the growth rate of gross domestic product depress the government’s debt ratio. But that would have been a bet on the future, because the relationship between interest rates and growth rates could change quickly. Fortunately, the federal government didn’t listen to the debt advocates at the time. When the Corona pandemic came, we benefited from the fact that we had enough fiscal leeway to finance the high support payments. A smart financial policy must take the possibility of crises into account. Who knows what crises await future generations for which they will need financial buffers?

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