Germany is about to socialism, at least according to the definition of former Chancellor Helmut Kohl. “In a state rate of 50 percent starting socialism” he said. It comes to bank bailouts and increasing social expenditure, subsidies – all of which drives up government spending.
Almost half of the income generated was diverted in the past year at the disposal of the state. Where exactly the optimal is state quota, no one knows. Anyway, it would depend on the quality of government spending. 100 billion was from the state last year are for education. A lot of money, but by international standards it is rather too little. Popular, however, are spending on subsidies. 160 billion are donated to the public sector.
Eucken after the government’s job is to set out a framework for society and the economy, but not to interfere in the process. Eucken follow all subsidies should be eliminated. This would be enough the recently announced tax relief of 10 billion refinancing equal to 16 times. In addition, the change of system would be postponed for now.
The importance of emerging markets
The importance of emerging markets is rising by the industrialized nations of the world. Especially in the U.S., there is great scepticism about the BRIC nations. Of course, the rise of Brazil, Russia, India and China cannot be stopped, even though the financial and economic crisis.
Studies attest an irresistibly strong economic growth, but also an ever-growing share of global gross domestic product. Short and medium term can be also expected with increasing wealth in broader social classes. Europe, above all Germany, is benefited from the rise of the BRIC countries. West Germany exported more goods while already in the BRIC countries than in the United States.
During the financial crisis has been growing steadily, the importance of free trade. Given the economic weaknesses of the EU and the U.S., the leading players in the international trade policy, it would be more important for markets to open up further and bring productivity enhancing reforms. In this way, also to strengthen competition on the road. Instead, the U.S. is on the leading role in the international trade policy. Therein lies the key to the crisis. We have a choice: liberalization or further crisis