People and Politics Forum 09. 01. 2009

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A stimulus package for Germany – political parties clash over ways out of the crisis

Germany’s governing and opposition parties currently agree on one thing only: more needs to be done to get Germany through the global economic crisis. Proposals range from heavy spending on public infrastructure projects, to tax cuts, to state guarantees for jobs in the automotive industry. But the political parties are at odds over what to remedy to prescribe. The debate comes as Germany enters a year of crucial elections, ranging from local and state polls to a general election in September. We take a look at the ongoing debate.

Our Question is:

"Can our governments beat the economic slump?"

Karl Froehlich, in Australia, writes:

"Who else, apart from the politicians, can stop this economic crisis? They are the ones who have to help business, mostly by boosting consumer purchasing power.They also need to take those to task who triggered this crisis, primarily the banks who made enormous profits and whose irresponsible greed led to losses they then palmed off to taxpayers."

Thiago Garone, in Brazil, puts his faith in governments:

"The neoliberal view said that the markets regulated themselves, but the reality is that the state must be present. I am confident governments will bail us out of this crisis, with the common sense of the heads of state."

Gerhard Seeger, in the Philippines, studies the latest developments:

"What exactly do people want: a free-market or a state economy? At the moment it looks like state regulation, which is fine when it involves building and renovating roads,schools etc, but what you hear from free marketeers is that they can do things better and governments should stay out of things, even if the impulse is started and funded by tax money...But people will only react if they have confidence, and building this confidence needs to be the task of governments..."

Amin Yoqurti, in Jordan, is skeptical:

"This is not a small crisis, it's the biggest in 50 years. Politicians can't end it on their own. They need the help of economic experts, NGOs, in fact all of us...."

In the USA, Lee Davis believes political measures might work:

"Perhaps yes, but we have international laws in place that (also) require large corporations to be good citizens whereever they are."

René Junghans from Brazil writes:

"Properly applied policies can likely halt the economic crisis. First of all, taxes should be reduced to give people more buying power without creating inflationary pressure. If wages and salaries were to be increased, this could cause a greater amount of inflation. I think it is correct for policymakers to approve investments in road and railway building, because that creates more jobs. But creating jobs by government decree to stabilize a free-market economy is wrong, because it runs counter to the principle of free initiative. Policy can also be used to promote independent, small entrepreneurs to hire more workers by giving businesses tax breaks or low interest loans. What's important is that people shop and spend money to prevent the economy from grinding to a standstill."

The editorial staff of ‘People and Politics’ reserves the right to shorten letters received.