Verlustangst

A guest article by Henning Vöpel, Director of the Center for European Politics (cep), in the Badische Zeitung, entitled "Angst vor der eigenen Courage (Fear of one's own courage)," inspired Red Baron to write the following blog post.

Red Baron has long argued that there will be no more real economic growth but only pseudo-growth, in which the large but unchanging pie of the global economy is merely redistributed.

These efforts can currently be observed in the United States, where the president is trying to make foreign imports more difficult by imposing tariffs. This should lead to jobs being brought home to manufacture the previously imported products in the US. Tariffs are intended to make the American economy great again at the expense of countries that rely on exports, such as China and Germany.

Therefore, the Germans' fear of losing their jobs is quite understandable when the automobile industry, once the poster child of Germany's export surplus, has already announced massive layoffs. For most, job loss will be followed by financial and social decline.

In this stressed ambiance, it is more noticeable than ever that the party platforms for next Sunday's general election make big promises. Fulfilling them will require huge amounts of taxpayers' money.

 The Ifo (Information and Research) Institute in Munich published a study, "Reform Proposals or Tax Giveaways? The 2025 Election Platforms Put to the Test"

Mit Anpassung (with adjustment) means that any "deficit" money spent will lead
to increased tax revenues, and thus, the overall deficit will be mitigated.
N.B.: The left's tax revenues are due to massive taxation of the high earners and the rich.

Calculations by Ifo show that the financial gaps for the upcoming budget could reach up to 200 billion euros, depending on the promises of the various parties. Economic growth of 10% is needed to cover 100 billion euros, but don't forget Red Baron's initial statement.

Every party talks about potential savings, but where are they? Substantial savings involve bold changes in many areas. However, the election platforms of all parties contain neither convincing concepts nor attractive visions, but mainly false promises. The established centrist parties are afraid to talk about necessary, painful financial cuts before the election for fear of losing votes to the AfD. This far-right opposition party* does not have to implement its full-bodied demands and promises.
*Keyword: Brandmauer (firewall).

Recently, the number of young voters on the left of the party spectrum has increased. They like to understand that future social unrest in large sections of the population can only be avoided through a massive redistribution from rich to poor.

Caressing the feeling that "everything used to be better," German minds are dominated by the Verlustangst (fear of loss). This sounds in Vöpel's original words, "The comfortable illusion of prosperity of recent years has already turned into an almost paranoid fear of loss. Every group feels disadvantaged. This is socially dangerous because politics is becoming a pure zero-sum game*. Defending the present (preserving vested interests) is becoming more important than conquering the future."
*Germany's economic growth in 2023 was -0.3%

And Völpel continues, "In general, people value the risk of losing their status quo more than the chance of gaining. Thus, innovation and start-up activities are lower in the Old World than in other regions of the world. Mentally, it feels like there is hardly anything to gain but much to lose."

The next German government must be straight with its citizens. Those who govern us cannot avoid new debts or make painful cuts to tax-funded services. Above all, they must interre their mantra that debt will later be reduced through economic and labor market growth.
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