Following the daily news regarding debt reduction is a nerve racking event these days. Congress and administration beat each other in political gambling on the expense of the American people. Both have their interests and are fighting hard to come through with their agenda. Armadas of lobbyists, mainly on the republican side, are crowding the internet message boards and are promoting interests. For Main Street America there is nothing left than sit tight and wait. What will it be? Reduced medical services? Cut in Social Security? Tax breaks for the rich? Cut in government spending? Tax increase for the rich and corporate? Raising the debt limit? Improving infrastructure in order to be competitive? Programs for better education and workforce? Anything else?
Last week President Obama entertained visitors from Germany. While it is unusual for America to take a look at what others do, this time it seemed the German model caught some interest in the political writer scene and amongst economists (see link below). Taking a look at the last 20 years, it became clear that the Germans faced some of the challenges we currently deal with here in the United States. Infrastructure round up in Eastern Germany after the iron curtain fell, immigration issues for the same reason plus several wars in Europe and elsewhere, a spoiled population with no need to work, Germany being one of the biggest welfare states in the world. Looking at these problems and others and seeing what the Germans did, one is wondering on whether German measures could be used in the U.S..
The quick answer is no, unfortunately not. Political system differences (only two parties), different party donation rules, different take on the government’s job and, I am afraid to say, a lesser politically and generally educated population in the U.S. make it impossible to adapt the German program here in the United States.
With only two parties and the current “donation rules”, political decisions and actions are always in danger of being “bought out” by lobbyists. Donating $260,000 to one party and $240,000 to the other, as it commonly happens, can have an influence on political decisions. The winner of any election is barely the man of the entire population. Nearly the half of the population is always in opposition. In Germany, coalitions form the government and represent more interests of the people. Many Americans argue that the government needs to stay out of everything and “markets” need to do the sorting out. In Germany the government is seen, and is, the balance between different sides, regulating and steering politics and business. Some in the United States, “educated” by certain groups sound bites, would call such as “socialist”, “communist” or “liberal”, without knowing what the words actually mean. Many European countries have also understood, that certain groups of the population need help and support, for various reasons and that such support actually pays off. While the Germans have cut down on this support over the past ten years, those that now say “aha, here we go, the freebies have to go”, need to understand that, even with cutting down services, Germany’s social services still beat American social services, including health care, by far.
U.S. politicians need to find the right mix in their negotiations for debt reduction and prosperity, matching the people’s need. The priority in all discussions should be people. America needs tax income, more of it. That can only be accomplished when jobs will be created and taxes will be increased for the rich and corporate. There is nothing wrong with tax decreases for those groups. As a matter of fact, this is a must happen, but only after delivering their “social services”, jobs and investments. If the tax decreases are given before, the money goes somewhere else.
America is on the brink of financial default. It is important that those in Washington understand what their responsibility is. A good poker game is a good thing, gambling with your peoples lives, is not.