Thread by @maxkrahe

@adam_tooze I’ll do a quick and dirty translation later this afternoon!

@adam_tooze Here it goes: George Orwell is spinning in his grave, at high velocity. Why? The lead programmatic proposal for the upcoming @CDU party conference. Thread (1/N).

@adam_tooze @CDU Core demand is a pledge of fealty to Maastricht treaty, the SGP, constitutional debt brake and the “black zero”//balanced budget commitment (more stringent than the constitutional req). All this in the name of “responsible and solid fiscal and financial policy.” (2/N).

@adam_tooze @CDU Alas, the debt has NOTHING to do with financial or fiscal responsibility. Legally, it’s a one year cash flow brake. It has the massive loophole of not covering certain forms of spending commitments that don’t register in the annual budget. (3/N)

@adam_tooze @CDU But more importantly, it “solves” a “problem” that’s NOT the result of irresponsible democratic parliamentarians: as @MSchularick has shown (onlinelibrary.wiley.com/doi/abs/10.111…) private debts are the problem; historically, democracies are good at reducing public debts if necessary (4/N)

@adam_tooze @CDU @MSchularick Plus: a major part of public debt is due to bank bailouts and extreme tax avoidance by large corporations and wealthy families (amazon.com/Triumph-Injust…). Main problem of public finance = privatisation of gains, socialisation of losses. (5/N)

@adam_tooze @CDU @MSchularick NOT “high” social spending or the alleged myopia of parliamentarians (note: what does not trusting the Bundestag with budgetary sovereignty say about the @CDU’s understanding of democracy...!) (6/N)

@adam_tooze @CDU @MSchularick 2) The “black zero” (even more hawkish than the balanced budget amendment) is just as irresponsible. Truly responsible choices between bond-financing and tax-financing public budgets are HIGHLY context-driven. One size NEVER fits all here. (7/N).

@adam_tooze @CDU @MSchularick Hence a permanent tying of hands here is the height of irresponsibility. Like a driver who decides to block the steering wheel in one direction. (8/N)

@adam_tooze @CDU @MSchularick The conservative response: let’s necessary investments without taking on new debts. But actually responsible politics today means dropping €100bn+++ on a Green New Deal, not a billion here or there on cosmetic upgrades. Esp if those are financed by investment cuts elsewhere! 9/N

@adam_tooze @CDU @MSchularick Fetishising the black zero might even be the “kinkiest” thing Berlin has to offer right now: investors are literally (!!!) paying the Bund for taking cash and giving them bonds. The @CDU’s response: “nah mate, keep your free cash. No major investments needed here.” 🤦‍♂️🤯🤪 (10/N)

@adam_tooze @CDU @MSchularick But—politicians are rarely irrational/kinky (well). So, cui bono? Black zero->structural lack of demand->weak currency (in part b/c ECB forced into low interest rate policy. So much for constant clamour from DE conservatives about low r!!!)+more slack in labour mkt (11/N)

@adam_tooze @CDU @MSchularick Predictable results: high and stable profits for exporters. Risks and side effects: ↗️ inequality. ↗️ Risk of Eurozone exploding (where is the demand supposed to come from to put Greece, S Italy etc to work??). ↗️ CO2 emissions//failure to meet climate targets. (12/N)

@adam_tooze @CDU @MSchularick Migration effects also contraproductive from perspective of @CDU: given Germany is (allegedly) near full employment, extra demand would stimulate jobs elsewhere. Migration goes to where the jobs are. Hence balanced budget = Migration attracted to Germany (13/N)

@adam_tooze @CDU @MSchularick (Note: Migration effects are not a good argument against balanced budget, but it shows the dogma and confusion around financial and fiscal policy in the @CDU!) (13/N)

@adam_tooze @CDU @MSchularick In sum: @CDU wants 💰💸💰 for export industry and Mittelstand-capitalists. Willing to impose (existential!!) climate- and EU-risks on younger generation. Then dares to sell this as “driven by an ethic of responsibility”. The chutzpah!!! Bold move, @CDU, verily a bold move (/end).