Several times in the past, I have written about how Germans oppose tax cuts. Now, Germany is doing so well that tax revenue far exceeds budget plans – it's like Germany is undergoing the boom the US had in the 1990s. According to Deutsche Bank, tax revenue is up 10 percent, and the budget deficit is now below two percent of GDP.
The governing coalition has responded in an American way by saying it will lower taxes, but the Germans are having none of it. Economics journal Handelsblatt – the closest thing that Germany has to the Wall Street Journal – announced today that it is sending a copy of today's issue to all members of the FDP (Germany's libertarians, the party closest to the Democrats and Republicans as I once explained); the paper argues that the debt should be paid off before taxes are cut, and apparently readers overwhelmingly agreed, as the letters to the editor indicate.
As I mentioned in that blog post about the FDP, what started off in Germany and Austria – and partly in Freiburg – as "ordoliberalism" has become a blanket call for smaller government in the US. But the original idea lives on in Germany, and yesterday the editor of Handelsblatt published an editorial entitled "Der große Selbstbetrug" (which could be loosely translated as "Facing the facts"), in which he argues, as he himself puts it, along "ordopolitical" lines that "we should pay down our debt before we fritter away our future capital."
So there you have it – German politicians continue to propose tax cuts, and Germans will have none of it, with the people behind Germany's version of the Wall Street Journal being among the most vehemently opposed.