first of all the author wants to apologize for part II being about German austerity myth instead of about some topics announced in part I. But as always something the author reads/hears/watches that inspires him to write some comments about it. And since the whole crisis situation is constantly on his mind anyway, many of the articles are just lacking being written, but certain topics have been on his mind for a long time.
Nowadays just after the election of Francois Hollande there is even more talk of austerity vs growth and it was already planned to collect more articles fitting in the one or the other category, which would eventually be part of a new factual blog entry on this blog's main website. So there will be another purely factual entry later, but first the author is feeling obliged to make a few remarks about the so called 'austerity'. Something that many German orthodox, self declared defenders of proper European budget keeping praise. This dogma is repeated all over again since weeks, months now and to be honest it is astonishing that so far not one journalist had asked the all important question IF Germany had undergone strict 'austerity'. Or did they not in fact practice 'tax & spend' and that to an extend that many German taxpayers, individuals as businesses alike, are constantly moaning about their declining incomes after taxes and duties. Did nobody dare to ask questions about the tax hike in 2007 where Chancellor Merkel and her finance minister Steinbrück did raise VAT from 16% to 19% ? The biggest increase in the history of the federal republic of Germany, going back till the end of the 1940s ! (chart 1991-2008 by FAZ)Was nobody asking questions about ever higher levels of tax revenues, steadily rising levels of state income, now reaching record levels never recorded before ? Even after a short dip during Germany's mini recession after the Lehman event in 2008, it is now producing ever new proud headlines of 'new records' and 'steadily rising tax revenues until 2020'.
Did none of the economists dare to take a look at the statistics as well, were tax revenues are one thing, the debt level is second and the employment of state employees a third , and pensions of state employees another forth side of the same coin. Did anyone notice the extremely highly spending on social costs for keeping +-3 million people out of work on the hand and the ever growing shortage of skilled workers, engineers, academics on the other hand ?
Coming back to the (luckily) short lived dip after collapse of Lehman Brothers, does nobody remember purely anti-cyclic Keynesian countermeasures like 'Umweltprämie", coll.: 'Abwrackprämie' (a fixed amount paid in cash when buying a new car in return for scrapping the old one) or 'Konjunkturpaket I+II' (governmental payments to municipalities in order to stimulate construction/refurbishment of public buildings/roads/etc) ? How about the gigantic payments of German electricity consumers forced by 'EEG-law' to give about 3,5 Ct of every kWh used to producers of green energy, amounting to a yearly sum of some 14bn € (2012) ? (+some more 'German specialties' to be described in idiocy part 8 or so)
Did anyone notice a reduction of the numbers of state employees or cuts (latest agreement +6,3%) of their wages contrary to industrial workers (more & more lower paid contract workers being hired) ?
Not that the author condemns certain investments in infrastructure and/or the energy sector, but everyone should be aware of that gigantic program, as well as the even more gigantic hike in state debt, not only caused by German reunification ! A look upon the chart from the 1960s until the present day says it all, but what is the use, if no one is willing to listen to the simple truth expressed in plain numbers. Germany's Chancellors since the 1970s (Schmidt, Kohl, Schröder, Merkel) just know one way for state debt so far: "The only way is up" (see chart below article)
And even now where the so called 'Schuldenbremse' (debt break) is implemented in the German constitution and as pointed out before state income is at all time maximum, Mr Schäuble nevertheless takes it easy when it comes to reducing the deficit spending. And what is more shocking: He still doesn't want to acknowledge that the currently thriving German economy is responsible for those revenues. Germany's 'wizards' want to enforce 'strict austerity' on the other countries of the eurozone having a worse performing economy. And Germany does take it easy even with current optimum conditions. What a sham !
The author here is somehow shocked about the misconceptions even self-betrayal of some parts of the press, who are in the end show more of their loyalty to a political party than to the naked truth. Again the admission that one article sparked this authors rage and willingness to comment immediately.
So here it is: "Angela Merkel is Europe's last saver." (Die Welt)
One excerpt: "Merkel ist geradezu beseelt von der Überzeugung, Konjunkturkrise und Arbeitslosigkeit könne man nicht mehr wie in den 70er-Jahren auf Pump bekämpfen." engl.: "Merkel is almost obsessed by the conviction, economic slump and unemployment couldn't be fought anymore by indebtedness like in the 1970s"
There we have a classic example of fiction because of conviction. Compare that translated sentence to the programs Merkel put into effect quite immediately after the financial crisis. Look again at earlier section here where 'Abwrackprämie' & 'Konjunkturpaket' are being mentioned and add those countermeasures like quadrupling of 'Kurzarbeitergeld'. Take a look into 'indebtedness' again under the file: debt to GDP, federal republic of Germany 2009-2011. When you compare the rebounce of German industrial production after 2009 with the situation in e.g. in the Netherlands, you can see the effects clearly.
Sure there might always be a glimmer of hope, that after 40 years of steadily increasing numbers of public employees or rising debt levels, one (male or female) finally comes along, do a magic trick by starting to axe public spending on the one hand, while on the other hand giving the merits of it immediately back to citizens and businesses alike. So far the only principle seen here by the writer of these sentences is, that the more the state of Germany can get in tax revenues, it spends. That is not OK, but it is even despicable, if those people practicing those habits for years (Merkel reigns Germany since 2005) want to force others to do what one didn't do so far. Germany was lucky to have those Schröder reforms and also to have massive investments in energy efficiency and green energy, but other infrastructure was put on hold in order to give 'money for nothing' to millions of unemployment people. The word people is chosen instead of workers, since there are countless families where the children get benefits without having worked ever in their lifes. A whole 'social welfare industry' was created. On the other hand Ex-FinMin Steinbrück & others acting as fence of stolen swiss bank data in order to obtain even smaller amounts of cash, so far deposited in Swiss bank accounts. But now a German-Swiss tax treaty is ready to get ratified in Germany, promising Billions of additional taxes, but Labor is blocking the 'deal' in Germany's first chamber, the Bundesrat.
So it can be said Germany is Greece, but with the big difference of having a perfect system of getting ever higher taxes and other duties.
All in all it is just a gigantic swindle: The big German austerity swindle, to be imposed on others where domestically there is feasting. (Look at NRW, early regional elections because of regional deficit spending) Praying water (for others) and consuming wine ! Also in regard of surpassing the guidelines set by the Maastricht treaty. Once again in 2010 Germany reached 3,3 % deficit. And from the perspective of periphery countries repeatedly taught by Germany and The Netherlands how to perform in accordance with those rules, it must be rather bizarre, when those headmasters of school are also, at least sometimes, 'sinners'.
Take a look at German state debt:
Part I
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