850 billion euros in debt: Germany's path into American conditions!
850 billion euros in debt: Germany's path into American conditions!
The plans of the new German government, which would like to accept additional debts of 850 billion euros by 2029, seem to achieve new dimensions. In a historical step that is reminiscent of the situation in the United States, the government wants to use this money primarily for the armament of the Bundeswehr and the modernization of infrastructure projects. The amount corresponds to almost a third of the entire German public debt from the past 80 years, which underlines the scope of the measure, such as stern.de reported.
Why are such debt necessary? When considering a closer look, it becomes clear that the planned investments in streets, bridges, schools and hospitals are essential. Finance Minister Lars Klingbeil, who sees himself as a "Minister of Investment", plans to increase the total budget in the core budget to around 503 billion euros. By 2029, expenditure could even increase to up to 574 billion euros, with the defense budget playing a central role and is to be increased to around 153 billion euros by 2029. This means that the military budget is estimated with over 3.5 percent of the economic output, as Klingbeil explains in a detail of his draft, on the Zeit.de point out.
economy and future prospects
The possibility of lifting such enormous debts, but raises some questions. In addition to an increased tax rate or a strengthened economy, self -financing must also be ensured. The government plans to generate higher tax revenue through economic growth, but this is associated with concerns: Experts warn that the invoice could not work, such as Stern.de Notice.
In international comparison, Germany is still relatively solid with a debt rate of 63 percent of gross domestic product, especially compared to the USA, where the debt rate is now over 122 percent. While the German economy has only a deficit of -1.4 percent of GDP, the American deficit -5.8 percent of GDP (as of June 2024) is, as Destatis.de has published.delicate decisions are imminent
So there is a great financial effort in front of the government. Lars Klingbeil has already presented his designs, but the challenges are significant. In addition to the necessary answers to the household hole of 144 billion euros, which could arise between 2027 and 2029, it will be necessary to think about structural additional income and possible expenses. A clear plan for the counter -financing of debts must already be in the Law Gazette before 2029 to minimize future risks, which makes it clear that it is now to make the right decisions.
The German government is on the crossroads: Does it rely on growth through investments or will it take the path of debt without having the necessary backing through income? The next political steps and financial course will make a significant decision as to whether Germany manages to master its economic challenges and to remain stable in the long term.
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