The government's tax revenue growth in the last three decades is nothing short of mind-boggling. In 1990, the government took in less than 300 billion euros in taxes; at the beginning of the global financial crisis in 2008, it was around 500 billion euros; next year it will most likely be more than 1 trillion euros, i.e. 1000 (!) billion. That is some phenomenal growth in only one generation and substantially more than can be explained through inflation and real growth in value added. And yet, the money isn't nearly enough. Or so political representatives everywhere and on all levels of government keep saying. The specialist ministers in the Federal Cabinet have been screaming the loudest lately, even though the 2024 budget provides around 424 billion euros on the federal level alone for the government to fulfil its tasks. Federal Finance Minister Christian Lindner urges his colleagues to exercise budgetary discipline, and he will probably have to put his foot down together with Chancellor Olaf Scholz. Because now that the COVID-19 pandemic is behind us and the energy crisis is subsiding, they are fresh out of “emergencies” that would qualify as convincing reasons for circumventing the debt brake. The fact is that we have arrived at a new normal and are not experiencing a national emergency any more. 

Raising taxes and abandoning the debt brake aren't viable solutions in the long term, and not only because there is currently no chance of organising a political majority for it. Economically, it would exacerbate the problem rather than solve it. Germany is a high-tax country that is already putting a heavy burden on the commercial Mittelstand's equity financing ability as it is; therefore, raising taxes would be most unwise. From an international perspective, higher taxes would further weaken Germany's competitiveness as a business location. Giving up the debt brake instead would send a calamitous signal to capital markets and jeopardise Germany's credit rating, meaning Germany would have to pay higher interest rates on its sovereign debt; seeing as the country's debt burden has already been going up lately (reaching 40 billion euros), this is not a good idea, either. And there is another consequence that might be even more dramatic: tax increases could erode the stability of the euro, which depends on financial markets having confidence in the long-term stability of financial policy in the biggest country of the Eurozone and the European Union.

In short: saving is the only way. It cannot be done at the expense of investment, though, because that is the lifeblood of economic growth and Germany's economy is currently teetering on the brink of a recession anyway. Even more unsettling is the long-term outlook, because the nation is getting older – in every respect. For one, demographic trends in Germany are significantly worse than in neighbouring European countries, the UK or the United States. For another, the asset base in both the private and the public sector is considerably older than in those nations that are Germany's most important competitors when it comes to attracting businesses on a global level.