interview
Status: 02/02/2023 09:24 a.m
Aid packages, special funds, record debts: how should that be paid for? The chairwoman of the Schnitzer economy speaks in the interview tagesschau.de make sure not to have too many loads to be passed on to the next generation.
tagesschau.de: We have a year of massive state intervention in the economy behind us: subsidies for energy prices, special payments, support programs for the restructuring of industry. Who should pay for all this?
Monica Schnitzer: We are currently doing this by taking on debt. On the one hand, this is justified. Because we have such a big crisis and all of a sudden we need a lot of support in a short time – you can’t finance that in one or two years.
But you shouldn’t burden it on the next generation in 30, 40 or 50 years, you should make sure that this debt is repaid in the next few years.
tagesschau.de: But that doesn’t happen.
carver: You would have to ask the current generation to pay far more for that.
To person
Since October 2022, Monika Schnitzer has chaired the Council of Economic Experts, also known as the five “wise men”. She has been a member of the board since April 2020.
Schnitzer is Professor of Comparative Economics at the Ludwig Maximilian University of Munich (LMU). She received her doctorate and habilitation from the University of Bonn and was a visiting professor at Boston University, MIT, Stanford University, Yale University, University of California, Berkeley, and Harvard University. From 2006 to 2009 she was Dean of the Faculty of Economics at the LMU.
In her research, Schnitzer deals with innovation, competition and multinational companies. She has been active in political consulting for 20 years. In 2005, Monika Schnitzer was awarded the Order of Merit of the Federal Republic of Germany.
“Energy solos” for higher earners?
tagesschau.de: Does that mean practical? Who should pay how?
carver: The Council of Experts has pointed out that the gas price brakes are not accurate: everyone benefits. However, we agree that the poor, who would otherwise not be able to bear the high heating costs, must be supported.
Higher earners don’t need it. They get even more now because they used more gas and electricity for their larger houses. We have therefore proposed an “energy soli” that the higher earners should pay.
Or you can increase the top tax rate – but only for the time when there is general relief. In this way, the package of burdens and relief would be more targeted.
tagesschau.de: Is it not so much about redistribution for you, but about protecting the next generation?
carver: It is actually about not taking on so much debt at the expense of the coming generation. That would also fuel inflation even further. We call this the “fiscal impulse”. It doesn’t make sense to relieve the wrong people with higher government spending and thus drive up the inflation that hits everyone.
“Something has to be put aside for care”
tagesschau.de: Let’s move away from acute government spending towards the permanently paying social security funds: health, nursing care and pension insurance. It’s all getting more and more expensive. Who should pay for this?
carver: Those who benefit! Let me describe this using the example of care: We are living longer and longer. We have more and more people who need to be cared for. We can’t expect that to be shared by the general public.
Basically, it must be clear to everyone: something has to be put aside for care. The long-term care insurance does that, but the contributions have been limited.
At the same time, the income from which children have to contribute financially to care for their parents has been severely restricted. Only those who earn at least 100,000 euros gross themselves can be obliged to do so. However, long-term care cannot be paid for in this way.
tagesschau.de: How then?
carver: A reserve must be created. We need adjusted contributions to long-term care insurance.
Too little public discussion?
tagesschau.de: So higher premiums?
carver: Yes, higher contributions. Then you have to work on social balance again. Because for some higher contributions may not be possible. But it’s affordable for the wealthy.
tagesschau.de: That means: high social contributions, especially for the rich. Who wants to enforce something like that politically?
carver: The pressure has to come from the young people. We need a younger generation that makes this an issue, just as it does with climate protection.
tagesschau.de: They belong to the generation of profiteers and calculate that things cannot go on like this. Those who are really affected, the young generation, seem largely unconcerned. Isn’t it absurd?
carver: I don’t know if the young people really don’t care or if they don’t really understand the implications. It’s not really discussed publicly.