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Intergenerational Fairness

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Saving is the problem, debt is the solution

The Maastricht criteria in force (maximum 60% public debt ratio and 3% annual government deficit) have been set arbitrarily, are devoid of any economic rationale, have no scientific basis and hinder public authorities from investing in the future. These EU rules stand in the way of a modern, crisis-proof economic policy, which is why they must be abolished without replacement. Imagine that private individuals are only allowed to borrow 60% of their annual income - no one would consider this a sensible rule. In an economy, someone always has to go into debt so that others can save. The sum of all surpluses always corresponds exactly to the sum of all deficits. If the state saves, companies or households have to go into debt – but they often do not want to or cannot do so. The result is a decline in demand, less investment and rising unemployment. Right now, the state would have to invest in education, integration, health, care, the environment and infrastructure. Instead, we are pushed into an artificial crisis created by political rules because we are persuaded that saving is the solution. But it is exactly the opposite! A state that does not invest risks another year of decline in prosperity. This is not responsible, but economically negligent.

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Saving is the problem, debt is the solution

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