German Of The Day: Länderfinanzausgleich

That’s a beauty, isn’t it? And it means “German Länder fiscal equalization scam.” I mean scheme.

Länderfinanzausgleich

And THAT means.. Well, think Robin Hood. The rich and therefore “bad” German states (the ones on the left in the image) must be punished for this and therefore the Robin Hoodlums in the Bundestag take some of their money and give it to the poor and therefore “good” German states (on the right side of the image). Berlin, on top, is actually on bottom, so-to-speak, being the poorest of the poor. The Robin Hoods and the Bundestag are located in Berlin, by the way. But that’s just a coincidence, of course.

The theory being, I’m assuming here, is that this kind of completely unjust robbery and redistribution will encourage the poor “good” German states to finally get their acts together already so the rich “bad” German states don’t have to pay their bills anymore. That’s just a theory, like I said, of mine. I must say, though, this redistribution initiative has certainly had a positive effect here in Berlin these past thirty, forty, fifty years. Once you ignore the fact that not a thing has changed.

Berlin Schlusslicht, Bayern Zahlmeister.

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More Redistribution Needed

Or that’s what this article seems to suggest.

Redistribution

And this in a country that has already been redistributing the wealth for decades and decades or longer.

When it comes to the superrich, however, there are relatively reliable estimates in the form of lists of the world’s wealthiest people, with the one compiled by the US business magazine Forbes leading the way. A similar list is compiled in Germany by manager magazin. A team of tax experts led by Stefan Bach of the German Institute for Economic Research (DIW) has examined the wealth statistics compiled by the ECB and augmented them with lists identifying the ultrarich. And the team did so for three countries: Germany, France and Spain.

The result: The 45 richest households in Germany own as much wealth as the bottom half of the population. Each group possessed a total of 214 billion euros in assets in 2014.

Bad superrich! Bad!

Why would more redistribution be necessary in a country like Germany? Maybe because it doesn’t work. It can’t work, in fact. It is not, nor has it ever been, a zero sum game, this wealth business. Here or anywhere else. But it’s a great way for redistributing politicians to get elected. Again and again and again. To no avail.

“Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.”

Let’s Do The Math

Yeah, that makes sense. When Britain does it’s Brexit thing and leaves the EU the money they’ve been pumping into it all these years will stop coming in.

Brexit

That means the remaining countries – like Germany – will have to make up for this. OK. Are you still with me here? Good. Now can you tell me why this is supposed to be a news item? You should have worried about this before you failed to compromise with them and let them get away in the first place.

Of the expected 10.2 billion euros that will be permanently missing in the EU budget after the Brexit, Germany will most likely have to come up with an additional 3.8 billion annually if the general conditions remain the same.

Von den voraussichtlich netto 10,2 Milliarden Euro, die im EU-Haushalt nach dem Brexit dauerhaft fehlen würden, müsste Deutschland bei unveränderten Rahmenbedingungen rund 3,8 Milliarden Euro übernehmen.

German Of The Day: Netto vom Brutto

That means net pay from the gross. And gross is it ever. Only Belgium (think Land of the EU) does it better. Meaning worse, of course.

Netto

According to a report just published by the Organization for Economic Cooperation and Development (OECD), Germany has the second biggest tax burden worldwide. And we’re talking about middle-income people here, people. Not millionaires or anything.

The OECD calculated each country’s tax wedge – the gap between what employers take home in pay and what it costs to employ them, including personal income tax and social security contributions. Germany had a tax wedge for single, childless workers of 49.4 percent, behind Belgium at 54 percent. That means nearly half of a single person’s income goes towards taxes and social security contributions in Germany.

Please remember this the next time somebody starts telling you again how wonderful everything over here in ze Europe is (“socialized medicine” and all that). There simply is no free Mittagessen (lunch).  You can go broke eating free lunch over here.

„Die Belastung der Bürger ist deutlich höher, als uns bewusst war.”

Remember: Germans have more words for taxation than Eskimos have for snow.

Poor But Sexy, But Poor

Those were the days. Berlin used to be just (arm aber sexy) poor but sexy.

Poor

Now Berlin is poor but sexy, but poor. At least when it comes to trying to earn a living here.

The German capital pulls down the per capita income for the entire country. According to Eurostat (the European statistics office), Germany’s gross national product (with an emphasis on gross) would climb 0.2 percent if they could just find a way to factor out losers like us here in Berlin.

Poor? Yo capital is so poor it can’t afford to pay attention.

Die Hauptstadt drückt auf das Pro-Kopf-Einkommen der gesamten Bundesrepublik: Das Bruttoinlandsprodukt je Einwohner würde um 0,2 Prozent steigen, wenn man Berlin und seine Einwohner ausklammert, wie das Institut der deutschen Wirtschaft (IW) auf Basis von Daten des Europäischen Statistikamtes Eurostat errechnete.

Bayern Munich Wins DFB Cup For The 2,397th Time

What a surprise or something. And right here in Berlin, too. And that after another fascinating goalless finish in normal time. I got lucky, though. I only injured my forehead twice (slightly) nodding off during the match.

Hummels

Bayern management has already announced plans to celebrate the occasion by buying the next best Borussia Dortmund superstar money can buy. If there are still any left that they haven’t bought already, I mean. You know, the rich get richer and all that?

Während Bayerns Thomas Müller im Pokalfinale einfach “die Eier in die Hand” nimmt, versagen Borussia Dortmund im Elfmeterschießen die Nerven. Das nächste Titeltrauma veranlasst BVB-Coach Tuchel zu einem Feuerwerk der Selbstkritik – inklusive einer verbalen Abschieds-Ohrfeige für Mats Hummels.

Little Oskar Thinking Out Of The Box Again

Well known for his refreshing viewpoints, Mr. ex-SPD, ex-Left, ex-Bolshevist, ex-you-name-it Oskar Lafontaine himself has come up with a brilliant new idea to save Greece from its upcoming euro Grexit exit: Get rid of the euro first.

Oskar

Being the true radical thinker that he is, he seems to have devised a radical new European economic system by which goods or services are directly exchanged for other goods or services without having to use a medium of exchange like dirty, filthy, old (or in his case new) money. And the way things look right now, Greece will be the first country to get the chance to test this out in a big way.

“Der Euro ist ein Rückschritt im historischen Projekt der europäischen Integration. Der Euro ist schon gescheitert, wir dürfen uns da keinen Illusionen hingeben.”

Ultra-Safe German Government Debt?

It’s good to be the king. Isn’t it?

King

More than half of all German government debt with more than one year maturity is now trading negative.

Investors have been warned of dangers of holding German government debt, as unprecedented central bank easing sends the country’s 10-year borrowing costs towards zero.

“If you look at bunds in anything other than the shortest possible timescale, the risk becomes very clear.”

Why Germans Always Pay Cash?

Like, duh. Because they’re the ones who have it all.

Cash

But the real point isn’t that Germans love cash. It’s that—for the same historical reasons—they loathe debt. (Armchair anthropologists have also long noted that German word for debt—Schulden—comes from the word for guilt, Schuld.)…

In other words, the German tendency to settle up in cash undeniably reflects the fact that for much of the last century, Germany has been either on the brink of, in the midst of, or struggling to recover from, disaster. And traumas like that are bound to leave, if you’ll excuse the pun, a mark.

Why Are Filthy Super-Rich Germans So Low-Key About Their High Finance?

Well, for one thing, they know better than anyone that they live in the notorious German Neidgesellschaft.

ALDI

And for another thing… The figures show that private wealth in Germany is more unevenly distributed than in any other country in the eurozone. While the richest 1% have personal wealth of just short of one million euros on average, a quarter of adult Germans have no wealth or even owe money.

ALDI schönen Sachen!