"As the global economic crisis questions many long-hold beliefs about American and European economic policy, the U.S. press has discovered that some answers might be found across the Atlantic. Germany offers a fine case study for the advantages as well as drawbacks of increased government interference to bring the economy back on track".
----> West-Germany bought out bankrupt Socialistic East Germany back in 1990 and a lot of German tax-payer's money gets pumped into it ever since then (Would probably have been better to create a second "Austria" :-) )
http://www.time.com/time/magazine/ar...id=perma_share
summarized by
http://www.tapmag.net/wordpress/2009...onomic-policy/:
"There are three lessons for the U.S. to be drawn from Germany’s attempt to spend its way out of a major economic slump:
“[T]hrowing money at an economic meltdown isn’t a cure-all.” Two decades after the fall of the wall, former East Germany still lacks behind economically. 20% of the German population live here, but the region accounts for over 30% of Germany’s unemployed.
“[B]ig spending packages don’t work if the economic policies underlying them are miscued.” The decision by Chancellor Helmut Kohl to exchange West and East German currency 1:1 sabotaged the competitiveness of East German industries.
“[S]pending so much money in such a short time is bound to be wasteful.” This one is a no-brainer. Try getting a year’s worth of shopping done in one day. Then see how much of the stuff you bought you will actually need.
What can the U.S. draw from this? Mainly that expectations for the American stimulus package should not be too high. There will be failure. Also, failing fiscal policy can partly be blamed on monetary policy not being in step. Ideally, the two should be carried out in unison."
A popular joke during re-unification:
East-Zone Gaby (17) in Luck (Federal Republic Germany): My first banana!
Any takers?