I appreciate the analytical effort you went to in order to document your post, but the fundamental question is “can governments legislate economic prosperity?” The past years of German government has shown us that the answer is a redundant NO. Why would the new coalition be different, especially as you point out, even before taking power, they are supercharging the old coalition? I’m afraid all these billions will be wasted, only to profit yet another grift. Let’s talk again in 4 or 5 years.
Legislate prosperity? No, governments cannot do that.
But the economic history of the United States demonstrates the economic utility of defense spending--largely because defense is a legitimate function of government.
The question is whether the monies will be spent on legitimate defense items and not on whatever the politicians want to shoehorn into the defense rubric.
Given the cynical tactics being deployed by Merz and his soon-to-be-governing coalition, a double dose of skepticism is warranted that the economic plan as constructed will work.
But those cynical tactics underscore the vulnerabilities and weakness of Merz' incoming "grand coalition". Talk again in four or five years? We might be having this conversation again in four or five months--that's how unstable the situation is.
Thank you for another intelligent and comprehensive analysis, Peter. We are able to read through it and see how, in one way after another, Germany has painted itself into a corner.
For decades German politicians have indoctrinated their constituents that Green is good, industry is bad. Oil is bad, military is bad, capitalism is bad, investment is bad. Now these politicians have to suddenly reverse course and actually DO all of the things they have said are bad! How is that going to work out for them politically? Any member of the Green Party advocating for ramping up industrial production and favorable policies for the energy industry is going to be attacked as a traitor to Green philosophy!
I see long-term wins for AfD and similar reality-based political mindsets. Reality wins out, every time! It’s my birthday today, and this is like a present from the Universe: reality is winning, and the world is (painfully) righting itself.
This is going to be an interesting political drama to watch unfold.
On the one hand, as I noted when Germany held its election last month, the German voters have shifted significantly to the political right, but the “cordon sanitaire” the other parties in the Bundestag have declared regarding AfD means that the CDU has no choice but to do yet another “grand coalition” with the Social Democrats. Merz’ only hope of forming a government when the new Bundestag seats relies on the very party German voters rejected.
Irony abounds.
Now we have the double irony of the Merz-led coalition planning to ram through a constitutional amendment AND a spending program during the lame duck session of the Bundestag. The legislators the voters want gone are going to first rewrite Germany’s fiscal policy to suit their desires before they leave.
If Germany pulls off an economic resurgence, Merz might get away with it.
If the spending does not result in an economic resurgence, I can’t see any scenario where this doesn’t boomerang to the benefit of AfD, and quite possibly even before the next scheduled election in 2029.
I appreciate the analytical effort you went to in order to document your post, but the fundamental question is “can governments legislate economic prosperity?” The past years of German government has shown us that the answer is a redundant NO. Why would the new coalition be different, especially as you point out, even before taking power, they are supercharging the old coalition? I’m afraid all these billions will be wasted, only to profit yet another grift. Let’s talk again in 4 or 5 years.
Legislate prosperity? No, governments cannot do that.
But the economic history of the United States demonstrates the economic utility of defense spending--largely because defense is a legitimate function of government.
The question is whether the monies will be spent on legitimate defense items and not on whatever the politicians want to shoehorn into the defense rubric.
Given the cynical tactics being deployed by Merz and his soon-to-be-governing coalition, a double dose of skepticism is warranted that the economic plan as constructed will work.
But those cynical tactics underscore the vulnerabilities and weakness of Merz' incoming "grand coalition". Talk again in four or five years? We might be having this conversation again in four or five months--that's how unstable the situation is.
Thank you for another intelligent and comprehensive analysis, Peter. We are able to read through it and see how, in one way after another, Germany has painted itself into a corner.
For decades German politicians have indoctrinated their constituents that Green is good, industry is bad. Oil is bad, military is bad, capitalism is bad, investment is bad. Now these politicians have to suddenly reverse course and actually DO all of the things they have said are bad! How is that going to work out for them politically? Any member of the Green Party advocating for ramping up industrial production and favorable policies for the energy industry is going to be attacked as a traitor to Green philosophy!
I see long-term wins for AfD and similar reality-based political mindsets. Reality wins out, every time! It’s my birthday today, and this is like a present from the Universe: reality is winning, and the world is (painfully) righting itself.
Happy Birthday!!
Thank you - this made my day!
This is going to be an interesting political drama to watch unfold.
On the one hand, as I noted when Germany held its election last month, the German voters have shifted significantly to the political right, but the “cordon sanitaire” the other parties in the Bundestag have declared regarding AfD means that the CDU has no choice but to do yet another “grand coalition” with the Social Democrats. Merz’ only hope of forming a government when the new Bundestag seats relies on the very party German voters rejected.
Irony abounds.
Now we have the double irony of the Merz-led coalition planning to ram through a constitutional amendment AND a spending program during the lame duck session of the Bundestag. The legislators the voters want gone are going to first rewrite Germany’s fiscal policy to suit their desires before they leave.
If Germany pulls off an economic resurgence, Merz might get away with it.
If the spending does not result in an economic resurgence, I can’t see any scenario where this doesn’t boomerang to the benefit of AfD, and quite possibly even before the next scheduled election in 2029.