September 30, 2019 — As long as the German economy was doing well, as it was during the recovery from the 2008 global financial crisis, there existed a coherent rationale for German fiscal austerity. The national commitment to budget discipline was enshrined in the 2009 “debt brake,” which limits the federal structural deficit to 0.35% of GDP, and by the 2011 “schwarze Null” (that is, “black zero”) policy of fully balancing the budget. Indeed Angela Merkel’s government proudly achieved a balanced budget in 2012 and surpluses in 2014-18.
Category Archives: budget
The Lesson from George H.W. Bush’s Tax Reversal
Dec. 13, 2018 — When President George H.W. Bush was laid to rest earlier this month, the remembrances appropriately remarked on his general decency and competence. In public commentary, the encomiums tend to be followed by a “but.” For journalists and historians, it is “but he was only a one-term president.” He lost the election of 1992, in part because of the recession of 1990-91. For members of his own political party, the “but” is, “but he broke with the legacy of Ronald Reagan and with his own ‘no new taxes’ pledge.” They have always blamed his failure to win re-election on that perceived betrayal.