Debt budget 2021: who must save, who may celebrate?

Debt budget 2021: who must save, who may celebrate?

The outgoing Grand Coalition has approved half a trillion euros for the election year 2021. The social consequences are incalculable, because it refuses a fair burden sharing at the same time

The number crunching at the beginning of the now adopted 2021 budget law gives Boses an inkling. There have been "Revenues and expenditures established at 413 400 000 000 euros", The debt brake anchored in the Basic Law has been suspended for the second time in a row, it says, followed by lists of special assets and loan authorizations, which the finance minister, vice chancellor and future SPD candidate for chancellor Olaf Scholz in particular had insisted on. Planned spending adds up to almost half a trillion euros, of which just under 180 billion is net borrowing. In times of pandemic, all the rules have been suspended even among the hitherto strict budgeters of the government camp: The debt brake enshrined in the Basic Law has been suspended for the second time in a row.

Suspended but not expanded. Maybe in 2022, maybe later: In any case, the debt brake will be put back into operation in the foreseeable future, and then the majority of the population – to stick with this metaphor – will face a bumpy end to this Corona ride. For senseless comments by politicians involved and by provincial newspapers, which are now being "the right signal" talk, because that’s all that matters, "How this country continues to get through the pandemic crisis", avoid the central question. As music producer Kurt Feltz lyricized in 1949: "Who will pay, who ordered it?"

The order certainly did not come from the nurses and caregivers, nor from the other so-called Corona heroes, who, once the false applause has died down, are just underpaid salaried employees. But they will probably have to pay the bill.

The government and the opposition majority, while offering demands for new government services, are unwilling or unable to impose mandatory conditions for debt reduction, creating a devastating mortgage for the already disadvantaged in this society. One of the absurdities of these days is that the conservative Frankfurter Allgemeine Zeitung, of all newspapers, has to point out the consequences in its business section: "If growth slowed down or interest rates rose, debt sustainability changed. Soon repayment of the Corona debt is required by the debt brake anyway."

Billionaires earn billions more

This is true not only for Germany, but also at the international level. The poor die or pay. The rich are getting richer and, so far at least, are unlikely to be asked to bear the costs of this geo-economic disaster.

In the USA, for example, the income of employees in the private sector fell by 2.3 percent between mid-March and mid-October. Good 98.0000 companies have gone bankrupt. More than twelve million blue- and white-collar workers have lost their employer-sponsored health coverage. The German Federal Statistical Office has recorded and documented similar trends for Germany. The social consequences in this country cannot yet be estimated, especially since the death of businesses will be delayed, from retail to cultural institutions, restaurants and other sectors particularly affected.

If you are at the upper end of society economically, you have far less to worry about on this side and the other side of the Atlantic. The 651 billionaires in the USA have increased their wealth by one trillion US dollars since the beginning of the pandemic. With this money, the 330 million or so Americans – each and every one of them! – a little more than 3.000 US dollars in immediate aid.

Jeff Benzos (71 billion US dollars in asset growth), Elon Musk (119 billion US dollars in asset growth) and Mark Zuckerberg (a good 50 billion US dollars in asset growth) alone were able to make a significant contribution to overcoming the economic Corona crisis.

In Germany, too "our" 119 billionaires increased their total assets from 500.9 billion euros in March 2019 to 595 billion euros at last count. The winners are primarily the technology and healthcare industries, but also supermarket owners like Lidl founder Dieter Schwarz. Nevertheless, hardly anyone is talking about contributing to the costs of the pandemic.

Competition in an election year between hardliners and spenders

At least the chairman of the German Federation of Trade Unions, Reiner Hoffmann, touched on the subject. He first called for the debt brake to be suspended beyond 2021 and pointed to the high performance of the German economy. Anyone who insists on budget consolidation in the current situation risks company bankruptcies and rising unemployment. "The economic and social costs were significantly higher", Hoffmann was convinced, because: "Despite Corona, Germany’s national debt, measured in terms of economic output, is below the level of ten years ago."

And then Hoffmann concluded with an important and currently too little noticed remark: It was also clear that millionaires and billionaires had to contribute more to the community: "Therefore, we need a fairer tax system that relieves small and medium incomes and makes high earners and wealthy people pay more."

One of the main risks of the current corona crisis policy, the political debate and the public debate culture is that the questions about the after are not sufficiently asked. This is mainly due to the fact that the political time horizon of both the government and the opposition is apparently only up to the 26th parliamentary term. September of next year is enough, the day of the next federal election.

In view of the upcoming election, the debate is being dominated by two factions that are devastating in their effects. On the one hand, there are the hardliners, who accept a restriction and potential dismantling of civil rights and liberties because a hard line scores points in a fear-driven society (80 percent approval of the Corona policy is too much). On the other hand, there are the spenders, who distribute state funds with full hands, ill-considered and too often senselessly in such a way that large corporations profit, while the real losers are left alone.

Criticizing this is important in itself, because the political rewards for the established parties will not be missed. Because of the current performance and because of the foreseeable consequences.

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