[Economics] Debt Brake / Wealth Brake - How Germany slows down itself

Siehe auch:
[Wirtschaft] Schuldenbremse / Vermögenbremse - Wie Deutschland sich selbst abhängt

The EU Commission temporarily loosened the debt rules as a result of Corona which led to some governments to give their economies an urgently needed impulse. At this point the special dynamics are to be assessed as a result of the loosened debt rules.

More money is a necessary condition for more demand and more demand is a sufficient condition for economic growth. So whether the state or the sum of companies are in debt in an economy is therefore secondary. In addition the interest payments of the state are interest rates on accounts and insurance companies. Repayments are not necessary since the state can pay off government bonds that are due at any time with new government bonds. Should the state reduce debts as a sector, it would withdraw demand from the economy and at least slow down economic growth.

Since the EU Commission has loosened the debt rules as a result of Corona various euro member states have increased their budget deficits in order to alleviate the consequences for its economies. Additional public expenditures should replace demand which was reduced by the measures as a result of Corona.

[1] [2] [3] [4]

For the period 2019 to 2023 it is clear that Spain had the largest budget deficits and Germany had the slightest budget deficits. This immediately raises the question of why several governments in the same currency union have such different budget deficits. Since all countries were affected by the coronavirus.

[1] [2] [3] [4]

Just like the budget deficits the growth rates differ. While some governments have only dared to do too little budget deficits other governments have given their economics the long needed impulse.

[5] [6] [7] [8]

Here two countries are particularly interesting. Up until 2020, Germany had the steepest or highest economic growth of the countries compared. After 2020 however Germany had the flattest or lowest economic growth of the countries compared. Measured from 2020 it shows that Spain i.e. the country with the largest budget deficits has grown most. The least grown and even shrinked one is Germany i.e. the country with the slightest budget deficits. For the period under consideration the household deficits are proportional to the growth rates. Higher government debts have therefore led to more growth.

[5] [6] [7] [8]

It is usually assumed that higher budget deficits immediately produce high inflation rates. Although the price shock from 2021 to 2022 can be clearly seen as a result of Corona this dynamic applies to all countries. From 2015 to 2024 however the inflation rates of Germany, France, Italy and Spain were very close together. No direct correlation can be drawn to the budget deficits for the period under consideration.

[9] [10] [11] [12]

Einfache Standards

Dieses Blog durchsuchen

[Economics] Debt Brake / Wealth Brake - How Germany slows down itself

Kommentare

Kommentar veröffentlichen