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Why is Germany having a budget crisis and freezing spending? (euronews.com)
2 points by mo_42 on Nov 21, 2023 | hide | past | favorite | 1 comment


Probably because political decisions over the last 10 years have made German costs of manufacturing too high. When your costs get too high, you have to put your prices up. When you put your prices up, your sales drop because those prices tend to price you out of the market. When your sales drop, your profits drop. That means the government doesn't raise as much in taxes, and so cannot subsidise all those things they used to subsidise. That's called 'freezing spending', because you don't have the money to spend on those things any more. That also means your budget can't be balanced, and so you have a 'budget crisis'.

QED




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