The way recommended by some politicians and know-nots in the media to reduce a high national debt by taking on new debt. However, this would only be successful if – the newly borrowed money were used exclusively to improve and expand the national capital stock, – the investments made in this way led to increased production and – as a result – to an increase in international competitiveness. – So far, there is not a single case in economic history where this has been achieved. Already the first condition could not be realized. The funds raised through debt were largely spent on buildings that hardly strengthened the domestic economy and on (luxury) consumption. At the end of this road, there was always national bankruptcy and/or very high inflation, which ultimately expropriated all citizens. – See spending ratio, public, bail-out, deficit-debt adjustment, deficit ratio, blackmail potential, fiscal policy, fiscal referendum, fiscal compact, budget deficit, budget ratios, Methuselah syndrome, sustainability, Rogoff study, debt, floating, debt brake, debt cut, welfare state trap, sovereign debt repayment, sovereign debt pressure, stability and growth pact, sunset proviso, fiscal sustainability, imbalances, EMU internal, constitutional article one, wealth tax, payday basic rule,
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/