Economist Isabella Weber is urging the next German government to abandon the debt brake and invest more, arguing that the country is losing its economic connection to the United States and is in need of a economic policy turnaround. Weber, who teaches at the University of Amherst in Massachusetts, says that Germany has fallen behind the US in almost all economic indicators, including growth, unemployment and wage development.
To reverse this trend, Weber believes a “shaping and action-capable state”is necessary, one that can guide companies through transformation and protect citizens from economic disruptions. She argues that holding to the debt brake while cutting tax revenues means austerity policy, which further hollows out the state and makes bureaucracy more sluggish.
Weber also criticizes the government’s response to the COVID-19 pandemic, saying that it had been too slow to intervene and had allowed energy companies to drive up prices, ultimately contributing to a recession. “This waiting has mainly benefited the AfD”she says, referring to the far-right party.
Weber is advocating for an “antifascist economic policy”that would send a message to citizens in times of crisis: “We won’t leave you in the rain.”Many of her economist colleagues, she claims, act as if economic policy were politically neutral, but in reality, economic policy has massive consequences for the stability of democracy.
The economist sees a clear connection between economic policy, economic events and the rise of radical parties like the AfD. She believes that effective anti-inflation measures, such as a reduced value-added tax on food, could help keep such parties small. “But that can only be the first step”she emphasizes.