“Economy” boss rejects debt ceiling
The planned Corona economic stimulus program is causing heated debates: Now the chairman of the “Wirtschaftsweise”, Lars P. Feld, warns to set clear priorities when allocating money.
Dhe head of the “economic wise men”, Lars P. Feld, has called on the federal government to keep the planned economic stimulus program in check. “There must be no free beer for everyone,” said field of the German press agency. “The state must not be overburdened financially.” That is why the funds should be used as effectively as possible – where each euro brings the most. Feld turned down plans for a family bonus. “A family bonus or consumer vouchers would fizzle out.” The council of experts advises politicians on assessing macroeconomic developments. Colloquially, the experts are also referred to as “economic methods”.
The federal government plans to adopt an economic stimulus program at the beginning of June. The aim is to stimulate the economy in the course of the gradual easing of the corona restrictions. A severe recession is expected as a result of the crisis.
According to CSU boss Markus Söder, the federal government should be allowed to take on a maximum of 100 billion euros in additional debt this year to boost the economy. Bavaria’s Prime Minister had said that concepts for further new borrowing of up to 150 or 200 billion euros could not be financed.
Feld said: “I’m not a fan of a debt ceiling like the one Söder has now proposed in such an economic situation.” Because higher levels of debt could be necessary if the economy goes even worse. “But in the current situation so many interest groups have expressed their demands that we have to slow down.” The crucial point is to use the funds as effectively as possible.
Regarding demands from the SPD but also from the CDU for a family bonus, the chairman of the Advisory Council said: “In the current situation with ongoing restrictions, a family bonus is of no use, especially since consumers continue to feel insecure and many companies cannot produce because value chains have not yet been restored are. A family bonus or consumer vouchers would fizzle out. People would save and not buy in addition. That is why such measures are currently wasted money. “
It is better to use the money where it really brings something – for example, to expand the loss carry-back in corporate taxation, said Feld. “That increases the liquidity of the company and enables investments.” In addition, there should be relief in electricity prices, ideally by lowering the electricity tax to the European minimum rate. Relief is urgently needed, also because CO2 pricing for buildings and in traffic will begin in 2021. “Then there is another burden on energy prices for consumers and companies.”
In addition, private and state investments would have to be strengthened. “We realize that the public sector has to provide quite a bit of infrastructure, especially in the promising areas of digitization and climate protection. We need broadband coverage that is as comprehensive as possible in Germany and progress in expanding the power grids – not least for expanding e-mobility in cities. “
When it comes to energy-efficient renovation of public buildings, there is an enormous amount of catching up to do, said Feld. “With more investments, the construction industry could be supported, which is already reporting that fewer orders are coming.” In order to stimulate private investments, one could temporarily ease depreciation or permanently lower the corporate tax rate.
In an article for the “Süddeutsche Zeitung”, the “economic wise men” had already campaigned for an energy price reform, greater digitization and an expansion of the loss carryforward.