German Elections -- Results

[lord of the mark]

Originally posted by siron


My interpretation of the result:

They didnt want red-green for sure. (they couldnt do anything without cdu anyway...so everything was far to slow.)

Merkel was 24 points ahead a few months ago. Because the west german left didnt vote the ex-commies pds.

Then linke was founded by two charismatic figures (Lafontaine and Gysi). Further, Merkel was absolutely sure that she had won already. She asked an ex-lawyer and "tax-expert" to join there team but I dont think that any of his extreme proposals would help us. This guy is rarely a tax expert...he is more like A. Laffer a populist.

Arthur Laffer is actually a trained economist,IIRC.

[lord of the mark]

and lets not forget the big good news, (the best news of all is that this isnt even news, its so taken for granted)

Germany, even at a time of high unemployment and social strain, largely centered in a region that until 14 years ago had its only experience of democracy under the Weimar Republic, has yet again had a fair, free, democratic, lawful election. and we can all be confident the situation will be resolved peacefully and democratically.


bundesrepublik

Adenauer

Allied occupation

[Mazarin]

Originally posted by Boris Godunov
My understanding is that if they are unsuccessful in forming a government, then the President gets to appoint a minority government. I'm guessing he'd appoint Schroeder's Social Dems, yes?

The only minority government that makes sense is CDU/FDP. They are clearly stronger than SPD/Greens in the Bundestag and have a majority in the Bundesrat.
We will end up with a Grand Coalition in the end: Schröder is trying to gamble to make sure that at least if he doesn't win, his opponent loses -which is quite disgusting given the fact that we need a stable government asap.

[Colon™]

Originally posted by lord of the mark
and lets not forget the big good news, (the best news of all is that this isnt even news, its so taken for granted)

Exactly, look at it from the bright side. Even if Germany is without a gov't to reform the economy, then at least it's also left without gov't to screw it up.

[Proteus_MST]

Originally posted by Mazarin

The only minority government that makes sense is CDU/FDP. They are clearly stronger than SPD/Greens in the Bundestag and have a majority in the Bundesrat.
We will end up with a Grand Coalition in the end: Schröder is trying to gamble to make sure that at least if he doesn't win, his opponent loses -which is quite disgusting given the fact that we need a stable government asap.

At the moment a Jamaica-Coalition seems not unlikely,
i.e. CDU/FDP/Green Party. At least parts of the Green Party seem to be open for it.

Of course the most interesting question stioll is, who will be Chancellor.
Merkel? IMHO Not very probable, as a majority within the Bundestag will probably vote against it (The Chancellor will be nominated by the President, but has to be confirmed by a majority vote within the Bundestag)
Schröder? Only if the left party also votes for him [which isn´t very likely, as the SPD (like the CDU) refuses to initiate Coalition talks with them].

[siron]

Arthur Laffer is actually a trained economist,IIRC.

Let me quote Gregory Mankiw (2003-2005 Chairman of the President's Council of Economic Advisers) He writes about Laffer's tax cut idea:

Thinking Like an Economist: Why Economists Disagree: Charlatans and Cranks:

pp. 29-30: An example of fad economics occurred in 1980, when a small group fo economists advised presidential candidate Ronald Reagan that an across-the-board cut in income tax rates would raise tax revenue. They argued that if people could keep a higher fraction of their income, people would work harder to earn more income. Even though tax rates would be lower, income would raise by so much, they claimed, that tax revenue would rise. Almost all professional economists, including most of those who supported Reagan's proposal to cut taxes, viewed this outcome as too optimistic. Lower tax rates might encourage people to work harder, and this extra effort would offset the direct effects of lower tax rates to some extent. But there was no credible evidence that work effort would rise by enough to caues tax revenues to rise in the face of lower tax rates. George Bush, also a presidential candidate in 1980, agreed with most of the professional economists: He called this idea "voodoo economics." Nonetheless, the argument was appealing to Reagan, and it shaped the 1980 presidential campaign and the economic policies of the 1980s.... Congress passes the cut in tax rates... but the tax cut did not cause tax revenue to rise... tax revenue fell... government began a long period of deficit spending... largest peacetime increase in the government debt in U.S. history. Fads can make experts seem less united than the actually are... when the economics profession appears in disarry, you should ask whether the disagreement is real or manufactured... [by] some snake-oil salesman who is trying to sell a miracle cure...

[notyoueither]

Originally posted by siron

tax revenue fell...

I wouldn't do this, except you brought it up.

Do you believe that?

[Imran Siddiqui]

Originally posted by siron
Let me quote Gregory Mankiw (2003-2005 Chairman of the President's Council of Economic Advisers) He writes about Laffer's tax cut idea:

Thinking Like an Economist: Why Economists Disagree: Charlatans and Cranks:

pp. 29-30: An example of fad economics occurred in 1980, when a small group fo economists advised presidential candidate Ronald Reagan that an across-the-board cut in income tax rates would raise tax revenue. They argued that if people could keep a higher fraction of their income, people would work harder to earn more income. Even though tax rates would be lower, income would raise by so much, they claimed, that tax revenue would rise. Almost all professional economists, including most of those who supported Reagan's proposal to cut taxes, viewed this outcome as too optimistic. Lower tax rates might encourage people to work harder, and this extra effort would offset the direct effects of lower tax rates to some extent. But there was no credible evidence that work effort would rise by enough to caues tax revenues to rise in the face of lower tax rates. George Bush, also a presidential candidate in 1980, agreed with most of the professional economists: He called this idea "voodoo economics." Nonetheless, the argument was appealing to Reagan, and it shaped the 1980 presidential campaign and the economic policies of the 1980s.... Congress passes the cut in tax rates... but the tax cut did not cause tax revenue to rise... tax revenue fell... government began a long period of deficit spending... largest peacetime increase in the government debt in U.S. history. Fads can make experts seem less united than the actually are... when the economics profession appears in disarry, you should ask whether the disagreement is real or manufactured... [by] some snake-oil salesman who is trying to sell a miracle cure...

I think you're confused. It wasn't Laffer's tax cut idea, per se. Laffer's basic theory, IIRC, is accepted by most economists, they just disagree at where we are on the curve (at some point if you are taxed too much, you'll jump through hoops to hide any little bit of money).

[Atahualpa]

I cannot agree that lower taxes get people to work harder, at least not here. For most people that's just more money for working the same. OTOH the higher taxes the more they have to work to make a living

[lord of the mark]

Originally posted by Atahualpa
I cannot agree that lower taxes get people to work harder, at least not here. For most people that's just more money for working the same. OTOH the higher taxes the more they have to work to make a living

economists call that the income effect, as opposed to the substitution effect. Generally if something becomes more expensive, you buy less of it. OTOH if your income goes down, you buy less oif expensive items.

To determine which dominantes you have to examine empirical evidence, over time and across jurisdictions. IIUC most studies in the US showed that the substitution effect dominated - IE higher taxes caused folks to work less - but not enough for higher taxes to mean less govt revenue. But that was at tax rates prevailing in the US.

and again, trained economist doesnt necessarily mean GOOD economist. I was just trying to clarify MR. LAffers profession.

[RGBVideo]

Well, if the far left is not going to compromise with the SPD, then the credible options left are a CDU-FDP-Green -coalition or a FDP-SPD-Green -coalition. Both options would result in lots of favours to special-interest groups within the small parties.

Grand coalition sounds good, but I doubt it'll happen.

[Atahualpa]

I think the FDP has already denied to work together with red-green... Westerwelle said he wants real reforms to pass and that's not going to happen with Schröder's course. Also, I don't think liberal and social fits together so well.

OTOH, the greens surprisingly are not that opposed to reign with the FDP and the CDU. As I said, I think that'd be political suicide though.

LOTM: I'd say it's also a culture thing

[Proteus_MST]

Originally posted by VJ
Well, if the far left is not going to compromise with the SPD, then the credible options left are a CDU-FDP-Green -coalition or a FDP-SPD-Green -coalition. Both options would result in lots of favours to special-interest groups within the small parties.

Grand coalition sounds good, but I doubt it'll happen.

If with far left you mean the "Left party",
then it´s absolutely sure, that there won´t be a coaliton
between them and any of the big partys.

SPD as well as CDU made it absolutely clear, that they won´t initiate coalition talks with the left party (and the left party also already said that they plan to go into opposition )

[Harovan]

Originally posted by Atahualpa
OTOH, the greens surprisingly are not that opposed to reign with the FDP and the CDU. As I said, I think that'd be political suicide though.

The "Ampel" would be political suicide for the FDP, the "Schwampel" for the Greens. Tough dilemma, eh? Let's wait and see, which party is stupid enough to commit it. My money is on the Greens.

[Atahualpa]

The greens are probably to bite into the sour apple, true... I've heard the FDP is trying to lure them on board.

At least I think the Jamaika-Coalition has a higher chance of functioning than the Ampel, because the FDP's and the SPD's programs are quite incompatibel, whereas the greens could focus on their roots, omit the social part and go for ecology. They need not even lose that way if they do it clever that they carry off the bays for environmental politics.