More and more young people are demanding alternative financial policies

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FROM: Alicia Lindhoff

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Carl Muehlbach, creator of the fiscal future. © private

Initiatives such as Fiscal Future, Tax me now and the Plural Economics network want to show young people how important a sustainable financial policy is for their future

Frankfurt – Christian Lindner turns a blind eye sometimes. As long as the pandemic rages, coronavirus aid is paid, and vaccine stocks are built, the debt brake will remain suspended. But from 2023 the finance minister will no longer be willing to step down, which he made clear at the beginning of the new year. Then the normal debt brake should be applied again. That’s why Lindner cautions his cabinet colleagues to be frugal. Because: “We have a responsibility to the younger generation.”

Youth, optionally also “our children and grandchildren”: If you believe the protests from the election campaign, they are the MOST IMPORTANT clientele of the FDP. The clientele you want to protect from the extravagance of other parties. Governments that borrow today are piling up a mountain of debt under which the next generation, the tenor, will groan.

“Threat of a much-needed recovery”

Carl Muehlbach is 25 years old. He is part of this next generation, and it annoys him to be used, as he put it, to promote savings. Because from the point of view of a master’s degree who studied economics in Cambridge and Berlin, it is exactly the opposite of what the country needs today, and above all its generation.

Blocking protests
Not all young people want to avoid public debt. © JOACHIM STORCH

“If we save one now, we will jeopardize the urgently needed recovery.” Mühlbach believes that the debt brake is no longer relevant, at least in its present form. If you really want to lay a good foundation for future generations, you need to invest in areas such as education, climate protection, digitalisation and social sustainability. “Nobody will be satisfied with low public debt 50 years from now if we no longer have a planet worth living on.” slowdown in innovation.

The FDP positions itself as a party for the interests of young people – but how do young people perceive it?

But many people see the state as a thrifty Swabian housewife who was also willingly used by Angela Merkel, says Mühlbach. From his point of view: a German myth. It makes sense for private individuals to pay off their debts before retirement and have less income. “But the state is not a private household that is going to retire, and the sovereign debt is not a loan from the Sparkasse.” The state can service its debt by taking out new loans, and if interest rates are low – as it is today – it might even win. The German debate is full of myths, says Mühlbach, from an exaggerated fear of inflation to the belief that public investment stifles private initiative.

And because he wants to do something to counter this, he launched the Fiscal Future last year. Their goal: to tell young people why financial and fiscal policies also apply to them, to give them the tools to form their own opinion. The initiative is trying to do this, for example, on Instagram – a platform where many young people are, but where topics such as financial policy, to put it mildly, rarely go online. When young people deal with economic problems, it is mainly the young financial influencers who share investment tips and purported enrichment strategies, complaining about taxes and bureaucracy. Some of them actively supported the FDP during the election campaign.

The Fiscal Future initiative aims to counter this by trying to break through and exacerbate complex issues, for example with the #sparpolitikfacts social media campaign. “Poorer households are particularly suffering from austerity policies,” says one post, “What does austerity policy have to do with Brexit?” in another. Answer: The narrative of “no alternative” to austerity makes voters more receptive to populist messages.

Fiscal Future, Tax me now and Network Pural Economics: Young people are calling for a new fiscal policy

Carl Mühlbach has a clear position on the current economic and financial policy. He was politicized as a student during the educational protests in his hometown of Bremen, and is now a member of the SPD. However, he does not want to be seen as neither a party representative nor an activist, and emphasizes that the Fiscal Future works on the basis of facts and nonpartisan, and does not want to persuade anyone to make a specific opinion. “If more young people join the financial policy debate, that’s fine, no matter what they say.” In addition to politicians from the SPD and the Greens, Ria Schröder was also invited to the “Youth Dialogue” with experts from the leader of science and politics of the Young Liberals.

So far, active people have been doing voluntary work: before the next seminar, they populated the Instagram feed, flipping research on austerity and inflation between two exams and organized after-work events. A little less multitasking will be required in the future. Carl Mühlbach and some of his colleagues could make the Fiscal Future their main task from May. The initiative recently proudly announced that it had been funded by half a million euros by the European Macro Policy Network. In addition to the Fiscal Future, the Plural Economics network is also funded, which aims to diversify economic teaching beyond the neoclassical mainstream.

Interesting: The European Macro Policy Network itself has just been launched by the Department Future macro-financial think tank, which is also new. The money comes from a total of over 3.5 million euros in funding from the American “Open Philantrophy” foundation, which has stated that it wants to help politicians prioritize the fight against rising unemployment over the fight against inflation.

Austerity policy for the next generation? No, thank you, say young initiatives

The future founding team, led by the 30-year-old Philippe Sigl-Glöckner, wants to develop German financial policy proposals that “serve citizens better”. The expert panel calls for a ‘general review’ of the debt brake, increased investment, especially at municipal level, and suggests setting the goal of a fully exploited labor market instead of constant debt ratios. And their proposals have long aroused public debate. It was not until mid-January that Zeit invited Sigl-Glöckner to a debate with Hans-Werner Sinn, long regarded as Germany’s most influential economist. Fiscal Future, Future Department and Plural Economics Network, but also Taxmenow – an association of wealthy citizens who believe that they and other rich people pay too low taxes – New Economy Forum, Finance Watch, Tax Justice Network and Citizens Movement Financial return: More and more initiatives campaigns for a paradigm shift in German economic and financial policy. For public investment instead of savings, for tax policies that allow redistribution from top to bottom, for political control of financial markets or international cooperation instead of fighting for competitive advantage.

When it comes to money and personnel, at least, the initiatives – despite the support of some of them by the US – have little to oppose the concentrated power of big business associations and lobby groups. But these are not lonely voices in the desert at all: something is moving. The crises of recent years have made many people question the primacy of the economy. Where the financial crisis has shown how unstable global financial markets can become if no one controls them, the climate and corona crisis has made it clear that the existential problems of our time cannot be solved by the principle of “supply and demand” alone.

Internationally, the old paradigm of austerity, privatization and deregulation – also known as the “Washington Consensus” – is fading away. At the recent G7 meeting in southern England, country leaders even announced a new “Cornish Consensus” that is expected to include solidarity, “green and inclusive” economic growth and stronger regulation of world markets. Carl Mühlbach has the impression that mainstream science has changed, at least in the Anglo-Saxon countries. And even if he described the fiscal decisions of the new coalition as a “consolation prize” and wished himself more courage and clearer criticism of the debt brake, he has the impression that also in Germany there is much greater openness to other fiscal policies. positions than a few years ago.

Euro crisis as a key moment in politicization

There are many indications that he is right. Until a few years ago, it would have been unthinkable that the federal government last year approved the so-called corona bonds, i.e. common debt securities of all EU countries to finance pandemic-related expenses. “No commonality of debt” is the roar from Berlin towards Brussels, Athens, Rome and Madrid during the euro crisis. Instead, the most indebted nations should “do their homework”: save, reduce social systems and privatize.

Carl Mühlbach was a student at the time and had nothing to do with financial policy. “Back then, I was also asking myself why we should pay for Greece.” The way the crisis was presented allowed him only one interpretation: that the southern states lived beyond their means, and now the rest of Europe has to pay for it. Nevertheless, the euro crisis was a key moment for him: “Then I started to be interested in economics.” It was only during his studies in Great Britain that he got to know a different perspective and understood that the deficits of southern European countries are also related to the architecture of the euro area, which forces countries with extremely unequal economic conditions to one and the same monetary system. And that Germany benefited greatly from this construction. Today, he wants to enable others to change their perspective, to show that there is never one truth in economics either.

Also read: Young heiress Marlene Engelhorn fights for higher wealth tax

It is clear to him that economic and financial policy, as opposed to climate protection or racism, are abstract, dry topics for most young people, very far from their lives. “We probably won’t get two million people out on the streets. But we don’t have to. ” The strategy of the Fiscal Future is to address young people who are already active – as multipliers. They establish contacts with the Federal Youth Council and with party youth. Helena Marschall and other representatives of Fridays for the Future took part in the “Youth Dialogue” of this initiative. Mühlbach explains it this way: “We want to convey to those who are committed to a certain topic: Hey, you need financial policy as leverage for your goals” (Alicia Lindhoff)

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