Tuesday, November 15, 2005

 

The German Solution to Slow Growth

Raise taxes

And you know what? It is going to work. I have no doubt in my mind that the German economy will be in recession next year and seeing as how that must be what they want, they will get it. All evidence suggests raising taxes hurts economic growth so they must want a recession, Nein?

Welcome to the German version of the Smoot-Hawley Tariff Act of 1931. For those of you whose only idea of Smoot-Hawley is a comedy schtick by Ben Stein in Ferris Bueller's Day Off, it actually did exactly what Stein describes in the movie. It took a sad song and made it tragic by creating unnecessary barriers to imports, helping to deepen the global Great Depression. The protectionist instinct threw gasoline on the fire of a depression then, and the socialist instinct of the Germans will do much the same in Europe now.


Wow is this a bad idea. This is drinking beer, wine, and gin stupid. This is driving with a busted taillight with two drunk 15 year olds in the back seat stupid. This is putting your lifesavings on black stupid. But there is some good that may come out of this. When German unemployment jumps and revenues fall next year we can finally put to rest the debate over tax cuts being bad for the economy. Also, look for burning cars. I hear it is the rage among 'umemployed youths' in Europe.

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