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It is one of the rituals of this time: whenever the GroKo decides something for pensioners, mothers or combinations of both, the cheerfulness disappears in the executive floors of the German economy. Like this week at the Grundrente. Again, nothing for us - no pralinchen for the bosses. No tax cut. No reduction of annoying regulations for dismissal protection or so. As was usual among former Chancellors. Instead, once again "benefits" for the "clientele" of spilled parties.
Tenor: bad for the economy. So bad for the country. The wind blows the company anyway with "full force in the face", this week founding employer Ingo Kramer. Nobody can want that.
The curious thing about it could only be: If in these months the German economy of a recession (so far) remained spared, as the statistics office announced on Thursday, it seems that after all the arts that Adam Riese has left us, that the consumers have continued to spend money in Germany and thus supported the economy. That would not have been the case had it not been for so many benefits to retirees, mothers and others this year.
List of "benefits"
That the government of Ms. Merkel has a penchant for decisions that can not be clearly classed according to classical understanding as immediate gifts of well-being for bosses, can not be completely denied. Clear. In the course of the past two years alone:
- Nursing homes more money to increase staff and pay caregivers a little better;
- Elderly two times in a row, three percent more pension;
- Parents more child support;
- needy students more Bafög;
- Willing to build nice construction child money;
- older mothers get a little more pension,
- as well as - regardless of gender - people who were unable to work for health reasons at some point;
- Eastern pensioners were getting more to stop getting as much as Western pensioners;
- Hospitals got more money to, who knows, letting patients stay in the corridors for less;
- Schools more budget for the digital;
- Income taxpayers higher basic allowances;
- Contributor less deductions for health insurance, because now also join the employers again.
Quite a lot. The only question is, is this all bad for the economy?
Only the relief this year and next in income tax, according to estimates of leading economic research institutes add up to 7.5 billion euros - makes 7.5 billion euros more that can be spent by the people. And not on the moon, but in shops and car dealerships, so the economy. The increase in child benefit - makes in the sum of two billion more in the accounts. The maternity pension II alone this year almost four billion euros. And so on.
In addition, there are much more public investments for reviving the Bundeswehr, for refurbishing municipal infrastructure or incentives for the purchase of electric vehicles, which - via Tesla - is likely to benefit at least the Brandenburg economy in the future.
If you sum up everything that GroKo has poured into it, the economic experts estimate that this will cost more than 20 billion euros, which this year alone was redirected from the Treasury to the accounts of the people in the country. Which brings us to the topic of recession.
2019: No growth without "benefits"
This 20 billion equals 0.6 percent of total German economic output in 2019. What with a currently just expected increase of 0.5 percent in terms of this economic output means that there would have been a minus this year without this fiscal policy basket, a recession.
Especially since experience, then, not only the 0.6 percent of economic output would have been missing, which have been made available to the people via GroKo to spend, but also all that brings such a piece of spending pleasure in second and third effects with it. For example, that the dealer, who is currently buying more thanks to GroKo, also has more money in the coffers to go shopping for himself - or to hire someone in addition, who also and so on.
There is much to suggest that the "benefits" have prevented even a much bigger catastrophe. After all, German industry, which is much more dependent on foreign demand, has been plummeting since mid-2018 - and has already begun to lay off. In the automotive industry, the minus in production was sometimes even 20 percent. These are burglaries that would most likely have triggered chain reactions in (fiscal) normal times - with mass layoffs and bankruptcies.
A little more planning would be nice
That it has not come to that, according to all that the statistic gives, not only, but quite decisively to do with the fact that just in the year of the accelerated downturn, there is so much money that people can spend in addition. Even if that was not intended by those who decided that as a stimulus program. Luck.
As the institutes calculated in their new autumn report, what is left of economic growth in 2019 is completely beyond consumption. Everything else is shrinking or stagnating. "Consumption saves the economy," headlined this week the economists of the insurance group Allianz.
All this does not mean that the German economy can not get a recession anymore - nonsense. Or that it's always good to just spend money somehow. There is strong evidence that it was not necessary, either economically or to remedy social distress, to widen, for example, the maternity pension as it did under the political pressure of a party in the south of the republic.
And it would also be good to fine-tune such financial moves much better in a future plan, rather than letting them emerge more or less ad hoc in the coalition poker - and putting more money into a solid investment program that will secure future prosperity for the country.
It is also absurd to pretend that all these GroKo decisions are per se always bad for the economy - they can even protect against recessions. And as if any attempt to eliminate social imbalances in the country, an attack on the economy.
If it is true that some of the dangerous crises that the liberal democracies are experiencing now also have to do with the feelings of many people that not always those who benefit from the progress that deserve it - then maybe it's a pretty good investment in the future, to make sure that nursing homes are properly equipped, more is left to people who have children - or students are getting money to study that otherwise could not. And not just to relieve the economy.
You can also say thank you.
