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The sovereign debt crisis

Debts of subsidiary levels of government can be problematic – especially in Germany.The sovereign debt crisis in many European countries is the focus of media attention. It threatens us even a creeping indebtedness, which goes unnoticed and yet all concerned, the hidden liabilities of our towns and cities!Since the local level is formally excluded from the constitutional debt limit, they could become a loophole for saving recalcitrant state governments.

The countries could try to continue to borrow massively over the detour of the municipalities. In addition, give the mainly carried along by the German side rescue measures to combat the European sovereign debt crisis, a concern that the credit conditions of the municipalities could worsen in the future, which could feed through to the municipal total debt.

A comprehensive representation of the total municipal debt is becoming an increasingly important!A one-sided and focused on the municipal core budgets, analysis of financial position is the overall situation of many municipalities and municipal associations is poorly. In the last two decades an increasing outsourcing of municipal activities from urban budgets.

They are not rejected per se, but may be connected with a number of risks. These include a “cover-up of state activity”, a shift from debt and predatory private sector initiative.Thus, local government decisions continue to be taken in self-determination and personal responsibility. It is necessary to present the situation of the local core and associated budgets as a whole vividly. Transparency is the first step to prevent hidden debt!

At taxpayer expense

The strong economy provides bubbly tax revenues. Never before federal and state governments have taken more taxes than this year. In addition to the positive economic climate, the tax increase was also another reason: inflation increases the tax burden secretly.

It is an indictment because are available about € 600 billion tax take federal and state governments in this year. Nearly 6 billion more than expected in May. Yet it is not enough to compensate for the state budget. Instead, claims to be proclaimed for further tax increases.

The calls for higher taxes on the rich distract from the real problems in the tax system. The bracket creep is still not resolved. Especially the lower and middle income are affected. The bracket creep is caused by a combination of increases in income, progressive tax rates and inflation: the labor income increase analogous to prices, while real gross income remains constant. Because by the progression in tax rates, the state reached stronger at higher gross income.

The bottom line would be so especially the Treasury on higher salaries. 8.5 billion have been purged in 2012 also in this way into the coffers of the Treasury. Rising inflation, are moving in the same amount the income limits. Debates about the increase in the basic allowance would be obsolete.

The social market economy

The social market economy has made Germany ascend to one of the world’s leading industrialized nations. Nevertheless, they can only bring prosperity for all, if the basic principles: freedom, competition, liability, performance justice and solidarity are respected. What happens if they are ignored can be particularly impressive show on the example of the energy sector.

In a functioning market economy, businesses produce goods or provide services that are in the market looking for customers. In the market competition put on by duration only offers that are actually in demand.

In a liberal economic, order the goods supply works far better than in any state planned economy.For such an economic system can by state frameworks to ensure fair competition. In addition, the compliance with social standards in working conditions and the protection of the environment must be ensured.Nevertheless, what has been proven in many decades gets under increasing economic pressure schedule. Particularly scorned the market economy in the energy sector.

For 14 years, we guarantee to producers of renewable energy, differentiated by photovoltaic, biomass and wind, for two decades, beginning with the start fixed fees for the electricity fed into the grid. The bill mainly private consumers pay future with almost 5.3 cents per kilowatt-hour.

The result of this market intervention is well known. More than half of the 20 billion euros already expensive annual green fee goes into the most inefficient form of renewable energy. German manufacturers who benefited at the beginning or from the glossy promotion of this technology are long gone from the market. Chinese solar cells now dominate the German roof landscapes.

At the same time, conventional power plants are kept in readiness. Even for non-supply of electricity from offshore wind, energy is to be paid in the future, if the lack of network expansion is responsible. Of course, the taxpayers will be responsible for the network expansion, which was in the old world energy market still financed by utilities.

Another planned economic construction site appeared on the way already on the horizon. The automotive industry is suffering huge overcapacity. In France, the state is trying to save Peugeot; Opel in Germany once again is the focus.