The traffic light coalition is collapsing over the debt brake. It remains to be seen what fiscal policy course a new federal government will pursue. Will there be massive investments, or will further austerity measures be threatened? And what is appropriate for the current crises?
Mainstream economic research institutes say more government investment is needed. They call for a clear economic policy to restore economic stability. However, the current recession is not merely a reflection of cyclical fluctuations; it has deeper roots . We must address structural problems such as demographic change, the climate crisis, and increasingly authoritarian governments.
Let's look at the crisis in the automotive industry: For years it has been clear that, given the climate crisis, a move away from combustion engines is necessary and that switching to electric cars is not a viable solution for the future . But instead of discussing the nationalization of VW, VW management is now threatening massive job cuts.
The crisis is deep-seated – and it is social!
In addition to the climate crisis, there are other structural challenges, such as the care crisis, to which answers must finally be found. Keywords: pension reform, transformation of the healthcare system.
The German Council of Economic Experts also attests to structural problems in the economy in its annual report. Due to a lack of government investment, the economy is being allowed to deteriorate . Transport infrastructure, defense, and education are particularly affected. Business associations agree : the federal government has delayed investments for far too long.
Mainstream economists ignore what holds societies together: social infrastructure. This has recently been drastically cut back, the effects of which are felt daily. New sanctions on basic income , reductions in volunteer services and counseling centers , and persistent staff shortages in daycare centers, hospitals, and youth services—all this is a consequence of Lindner's clinging to the debt brake. Isolated protests are emerging, such as in North Rhine-Westphalia, where 32,000 people protested against the state government's austerity budget on Wednesday.
Despite the minimum wage increase and housing benefit reform, the social damage caused by the FDP-led fiscal policy is enormous. The social investment gap that is opening up before us requires a rethink, which is a priority in economic policy. The expansion of social infrastructure such as kindergartens, hospitals, and counseling services must be a central focus. Care must finally become the center of the economy.
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This article, entitled “Lindner strategy leads to devastation after the end of the traffic light system – urgent investments are lacking”, was first published as a column in the restaurant section of the Frankfurter Rundschau on November 19, 2024.
Photo: Bastian Greshake Tzovaras, CC BY-SA 2.0
© 2024. This work is openly licensed via CC BY-NC 4.0 DEED
