Excessive Discipline Has Halted Germany

Public debt around the world has reached unprecedented levels. Managing it requires the skill of a tightrope walker. Excessive debt can become explosive, pushing a country to the brink of collapse, as history has shown us. On the other hand, rigidly adhering to balanced budgets, as Germany did for too long, or abruptly increasing taxes and cutting expenditures to reduce debt can drive a country into recession. A better approach is to aim for a gradual reduction of debt while considering that in the coming years, more resources will need to be allocated to environmental protection and healthcare, and many countries will increase defense spending. What we absolutely must avoid is borrowing blindly, without a clear plan for spending the funds, as happened with the National Recovery and Resilience Plan (Pnrr).