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?
More government investment is needed, say mainstream economic research institutes. They call for a clear economic policy course to achieve economic stability. However, the current recession is not only expression of economic fluctuations but is rooted deeper. We must address structural problems such as demographic change, the climate crisis, and increasingly authoritarian governments.
Let us look at the crisis in the automotive industry: For years it has been clear that, in view of the climate crisis, a move away from combustion engines is necessary and that Switch to electric cars no sustainable Solution But instead of discussing the socialization of VW, threatens that VWManagement now with 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 Council of Economic Experts also acknowledges structural problems in the economy in its annual report. Due to a lack of government investment, the economy is living on wear and tear. Transport infrastructure, defense, and education are particularly affected. business associations voices agrees: The federal government has delayed investments for too long.
Mainstream economists ignore what holds societies together, namely social infrastructure. These have recently been severely cut back, something people feel every day. Sanctions on citizen's income, cuts in Volunteer services and Counseling Centers, persistent staff shortages in daycare centers, hospitals, and youth welfare services. All this is the result of Lindner's insistence on the debt brake. There are isolated protests, Who in NRW where on Wednesday 32,000 people protested against the state government's austerity budgeten.
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 appeared under the title “Lindner strategy leads to ruins after the end of the traffic light coalition – urgent investments are missing” first published as a column in the Gastwirtschaft 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
