Gutes Leben und gute Arbeit weggespart

Increasing public debts during the crisis are now a justification for broad cuts in expenditure. However, in many countries public debt was critically debated before and irrespective of the crisis. Germany even discussed and in 2009 finally adopted a severe constitutional debt brake. The paper illustrates how a tax reduction policy of the German federal government drained public households and forced federal and regional authorities to cut public spending and benefits. The post-crisis cuts now are just an expression of an accelerated reduction of public welfare. Increasing public debt is only second best, the paper argues. The first choice to fight increasing debt would be a revised and just tax policy.