[Wirtschaft] Mythos Fetter Staat - Schulden und Zinsen
The myth of a large and ever-expanding state is being perpetuated all too often these days. Minimalist state advocates and libertarians such as Milei, Musk, and Krall are making their ideas very popular. The key values are presented below.
First it is clear that the federal budget is continuously declining relative to GDP. The federal government's interest expenditures relative to GDP rose until the 1980s and have declined since 2000. However the federal government's interest expenditures relative to GDP have never risen above 2%.
[1, UVGD] [2] [1, UVGD] [2] [1, UVGD] [2]This development is not surprising as Germany has had enormous foreign trade surpluses since Agenda 2010 and monetary union (1999). In an economy someone always has to go into debt to the height of future savings and nominal growth. This is not an ideology but pure accounting since money is created when someone goes into debt.
The fiscal balances describe the difference between revenue and expenditure of a sector over a period of time usually one year. The sectors are the general government, the sum of domestic private households, the sum of domestic companies and the foreign trade of that economy as a whole. Consequently it is a flow variable and not a state variable. Surpluses mean savings by the sector and thus the sector in question is withdrawing demand from the economy. Deficits mean the sector is incurring debt and thus the sector in question is supplying demand to the economy.
The corporate sector meaning the sum of all companies has long been either a saver or a neutral sector. This is bad because it means the corporate sector is no longer fulfilling its role as a debtor for investments. But this development is the case in most countries around the world. Germany has a foreign trade surplus with other countries. Consequently Germany has export surpluses or import deficits.
[5, UVGD] [5, UBCABOP] [5, UBLC] [5, UBLH] [5, UBLGE]Germany was therefore only able to run budget surpluses because it ran foreign trade surpluses. And Germany was only able to run these foreign trade surpluses because it gained competitiveness through wage restraint as a result of Agenda 2010. However sufficient other countries were unable to compensate for this competitiveness due to the abolition of exchange rates as a result of currency union. Germany's low national debt is therefore not the result of particularly good fiscal management but rather the result of wage restraint and the currency union.
It's completely absurd that budget surpluses are particularly popular. Budget deficits mean that everyone gets more back from the government through spending than they paid in through taxes and levies. Budget surpluses on the other hand mean that everyone gets less back from the government than they paid in. Budget surpluses therefore mean that the government is saving money and thus destroying demand.
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[1] AMECO database
https://economy-finance.ec.europa.eu/economic-research-and-databases/economic-databases/ameco-database_en
[2] Gesamtübersicht über die Entwicklung des Bundeshaushalts 1969 bis 2023
https://www.bundesfinanzministerium.de/Monatsberichte/Ausgabe/2024/03/Inhalte/Kapitel-6-Statistiken/6-1-11-gesamtuebersicht-entwicklung-bundeshaushalt.html
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