USA and Labor Day in Germany: Debts on both sides of the Atlantic

It’s not a worth a new post to say that there are a few countries on both sides of the Atlantic that have to tighten their belts. Germany and the United States are no exception. But what to do in this situation?

 First a look at the development of their liabilities.

Since Germany was founded in 1950 the debts in relation to the public budget grew stronger. In the last 25 years there were extra costs for the reunification of Germany and the GDR, as well as a finacial crisis which did not help to better the situation, too.

Since we look at billions [Milliards in Germany] rather than at millions, the recent debt level is around 1,998.80 billion Euros. As a reminder: In 1950 it was about 9.57 billion Euros. North Rhine-Westphalia, by the way, is Germany’s federal state with the highest debts. One third of all the bebts.

Now to look at the United States.

In 2011, the deficit financing of the gross domestic product is at 98.5 percent. 11 years ago it was at almost 55 percent. The debts recent are of 14.2 trillion Dollar [in Germany 14.2 billion Dollar].

What to do now?

Saving money could be a first step. So the USA – President Obama – plans to increase taxes for people with higher incomes, to built an easier tax structure and to decrease the defence budget.

Germany on the other side of the Atlantic has “invented” the so-called “Schuldenbremse” [debts bracket (?)]. It’s not as innovative as it may sound. It’s a guideline to decrease domestic costs…

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