The hour of economists

What is needed in the current situation are economists who, with good arguments, resist the idea that the economic consequences of the crisis can be cured by simply spending more and more money.

Lars P. Feld, head of the

Mith conspiracy whispers, verbal witch burnings, dull roars and other forms of escapism, neither crises nor their aftermath can be combated in a meaningful way. With expertise and the willingness to discuss old and new findings in a meaningful and open-ended manner, you will get ahead more easily.

And so this crisis, which encompasses many areas of life, is also the opportunity for economists to participate constructively in the search for solutions to the crisis. In the current situation, level-headed economists are particularly in demand, who with good arguments resist the idea that the economic consequences of the Corona crisis can be cured by simply spending more and more money.

Many an economist seems to harbor the idea that growing national debt is not a problem because it finances itself through economic growth and the refinancing of outstanding bonds is secured by the central bank in case of doubt. However, almost every recession not only costs growth temporarily, it also damages the long-term growth trend.

Long-term economic growth in many industrialized nations is under pressure, if only because of demographic developments and low productivity growth. Unfortunately, it cannot be ruled out that the national debt will not finance itself. And then the widespread thesis that national debt is not the burden for future generations is no longer true.

In the long term, one should also not rely on the central banks as limitless buyers of government bonds. Behind the scenes, monetary policymakers have long been trying to teach governments that monetary policy cannot remain as expansionary as it is now for long.

How much leeway the ECB still has is not clear after the Karlsruhe ruling. That is why the Expert Council, now headed by Lars Feld, deserves praise, which defends itself against the fairy tale of the financial surprise bag and makes concrete proposals with proposals such as the expansion of loss carry-back for companies that can help the economy without ruining the state.