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Countdown to €/£ parity | 102 comments (102 topical, editorial, 0 hidden)
Re: Those damn Germans again... (4.00 / 4)
Frank Schnittger:
"All this will do is raise Britain's debt to a level that will take a whole generation to work off. The same people who would never touch deficit spending are now tossing around billions. The switch from decades of supply-side politics all the way to a crass Keynesianism is breathtaking."

Thus spake Steinbrück!

Independent assessment of the UK government's total budget (not just the VAT decline) by the IFS (no friends of the Labour party, I would note):

BBC NEWS | Business | Economic slowdown hits borrowing

And overall government debt will rise rapidly from the current level of 40% of GDP to peak at nearly 60% by 2013/14 before the government believes it can stabilise the budget gap.

German government borrowing as a percentage of GDP?

Well, in 2007, it was estimated at...

CIA - The World Factbook -- Rank Order - Public debt

20 Germany 64.90 % 2007 est.
by Metatone (metatone [a|t] gmail (dot) com) on Fri Dec 12th, 2008 at 04:31:40 PM EST
[ Parent ]
Re: Those damn Germans again... (4.00 / 6)
If Germany has so much more public debt, why is the UK crying, Germany should follow Browns policy?

Actually there are good reasons.

  • Trajectory counts. This 64.90% are only slightly more than 1998. In the last two years, this number was going down, while Britain was already running a high deficit on which Brown is now adding.
  • It is very credible that this high indebtness is a one off issue for Germany. Kohl was running a pretty conservative fiscal policy in the eighties. The unification was extremely expensive and made it necessary to adjust the revenue and the state's spending. For several reasons this took a very long time. There is no similar huge project in sight.
  • The Euro is pretty much reserve currency. Germany is likely paying lower and more stable interest in the long run and can therefore bear higher indebtness.
  • The private sector in the UK is in a much more dire situation than in Germany. Before the German state goes bankrupt, it will tap the private wealth. Brown's policy is doing the inverse, it increases gov't debt for making the private sector wealthier.


Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers
by Martin (weiser.mensch(at)googlemail.com) on Fri Dec 12th, 2008 at 07:15:54 PM EST
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Countdown to €/£ parity | 102 comments (102 topical, 0 editorial, 0 hidden)
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