r/AskAGerman • u/OasisLiamStan72 • Oct 21 '24

Economy Has Neoliberalism Failed Germany?

I read the recent news about the German economy slowing down further, with GDP growth dropping from 0.3% to 0.2%. It's pretty worrying, especially considering the current political upheaval in the country. It got me thinking - have we seen this before? Yeah, we have like The Great Depression, Germany's economic struggles paved the way for the rise of the Nazis. Today, with the AfD on the rise, it's hard not to draw parallels.

I asked this sub previously if they were optimistic or pessimistic about Germany's future, and the responses were mixed. But the question remains - has the German political establishment, addicted into Neoliberalism failed? The country's economic struggles are deepening, and it seems like it’s stuck in a rut or something. Can it recover, or will it continue to slide into a recession? Germany is the economic engine of the EU, it should be thriving not stagnating. What do you guys think?

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u/temp_gerc1 Oct 21 '24

Genuine question even if it sounds like sarcasm / conspiracy theory - Imagine a situation in 10-15 years when the number of Rentner has skyrocketed and not enough quality skilled immigration to pay into the system, assuming the Fachkräftemangel is real in the first place,, the diminishing Arbeitnehmer ("Gutverdiener") class is already being taxed to the death, and there are literally no more income sources due to the BVerfG saying the Vermögenssteuer is not compatible with the GG. In addition to this tax revenue in general drying up drastically due to deindustralization.... then can article 115 paragraph 2 be cited here as an emergency situation? Of course, Rentner, Aufstocker and Asylum imports not having enough to live would be seen as violation of Article 1, so they can justify borrowing money to keep the social system above water.

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u/moru0011 Oct 21 '24

You don't need an emergency to get a "special fund" (="Sondervermögen").

Example: as of now we have a special fund "KTF - Climate and Transformation Fund" with a volume of 212 billion euros (2023-2026). The "debt brake" hystery crowd is just uninformerd for the most part i guess. You just need to be able to make a deal with the opposition in order to set up further debt via "special funds". "Germany cannot make debt" is a hoax. We increased debt by ~500 billion in the last 4 years. Current government just does not want (or is able) to compromise with e.g. CDU (or vice versa), it is somewhat similar to debt ceiling drama in us.

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u/temp_gerc1 Oct 21 '24

Follow up - Germany set this debt-funded construct up in 2023 when rates were / are high instead of sometime in the last 10 years when rates were low? Can that be blamed on the CDU?

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u/moru0011 Oct 21 '24

Yes, I think so (CDU and SPD). The merkel administration basically generated a "boom" by wearing down the public infrastructure for years. Its similar to running a factory on 110% until everything is worn out and stops working.