Economic stimulus package (business activity support program, injection of credit for the purpose of stimulating or maintaining economic activity, stimulus package)

Special government spending to stimulate demand in individual sectors or in the economy as a whole. The money used for this purpose must either – be taken from other areas of responsibility (portfolios, departments) or – be raised through government borrowing. Since in both cases distributive incidental consequences arise, often even over several generations, economic stimulus programs are regarded today as a measure of last resort. – The view put forward in many textbooks that the state deliberately spends more money to stimulate the domestic economy in order to recoup the debts incurred for this purpose later through lavishly flowing taxes has not been substantiated so far. Instead, most of the programs fizzled out (straw fire effect), while government debt piles grew and cemented themselves. – See financial accelerator, fiscal policy, cobra effect, economic diagnosis, crisis foreshadowing, rescue routine, rebound effect. – Cf. Monthly Report of the Deutsche Bundesbank of August 2009, p. 61 (here also on the question of the correct assessment of an imbalance), Monthly Report of the Deutsche Bundesbank of October 2009, p. 24 (government investment prompted by the financial crisis; detailed account).

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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
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https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/