[lbo-talk] German unification poses problems

Dennis Redmond dredmond at efn.org
Wed Sep 22 17:15:47 PDT 2004



> http://news.bbc.co.uk/2/hi/business/3672712.stm
>
> Thirteen years later, the performance is still poor. Are we to blame that
> on capitalism now? Or capitalism, like God's grace, is good by
> definition, and any facts to the contrary are simply irrelevant?

But of course. Who needs facts, when you can recite calcified 18th century dogmas which would make Central Asian fundamentalists blush?

Germany's problems are more than a little overstated. East Germany's productivity levels were probably one third West German levels in 1991, and they've climbed to two-thirds of the West German level since - at great human cost, of course. The money spent on the reunification nicely counteracted Europe's early 1990s contraction, and public deficits in every industrial country are piddling compared to private and corporate debt. The Red-Green Government *should've* run deficits of 5-6% of GDP, actually, and then throttled down to 3% during the recovery.

-- DRR



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