The global economic and financial crisis and government stimulus programs

With the global economic and financial crisis also experienced a renaissance with respect to government stimulus programs. In addition, in many countries they had their effect. Nevertheless, this should not lead to calm and inactivity. Since the 70s, the most economists are very critical tuned. However, experience shows that there was usually more damage was done, more damage than it to contribute to a sustainable solution for economy.

It is a fact that a sustained higher economic growth cannot be achieved with government intervention. They seem to be successful only if there is a sudden, sharp drop in demand.However, it is necessary time all this to come into force and all to be designed purposefully. Here is another important thing. All this must be limited in time. The public finances are not permanent and they not should to be the burden on future budgetary margins. In 2009 and 2010, Germany spent 4.1 percent of GDP on stimulus programs. Thus, Germany was more ambitious compared with the EU.

Consequently, the accusations from abroad are unfounded. Nevertheless, Germany supported the international economy too little. For 2011, it is now time to begin the reduction of the costs of economic programs public debt in order not affect future growth.
The general government debt

The debt burden is massive. To 2 trillion piling up now, the general government debt of the Federal Republic. Inexorably progressing German government debt. End of this year, another record low is broken: Germany’s national debt will exceed the astronomical value of 2,000,000,000,000 euros.

In 2010, 325 billion euros have been piled on new debt. Thus, the debt has increased by an average daily incredible 890 million euros. All this has a dramatic effect. According to estimates by the Federal Ministry of Finance, the interest charges for the debt in 2010 are 58.5 billion euros. The money for other purposes, such as education and infrastructure, is not available. In addition, the interest rates are currently at historic lows.

Continue to rise only slightly, the interest on government debt .Given this bleak picture, one could argue that the policy finally initiates the big changes, which includes a call “Get out of the debt trap”. Given the enormous challenges that adopted by the government, the fiscal consolidation measures are simply insufficient. It would allow the policy to save billions of dollars in subsidies.