Economic stimuli or broad funding for families?

by Thorsten Koch

While the federal government is banking on incentives for economic development, and does not support cash checks for citizens, SPD chairman Saskia Esken demands the distribution of Corona child benefit. Chancellery Minister Helge Braun (CDU) said he didn’t think too highly of helicopter money, but if the infection rate remained low in Germany, stimuli to the economy and by increasing demand could make sense. Money is a very finite resource, he emphasized, using the term “sustainable investment”, a goal which should be targeted instead of alluding to short-term consumption.

Getting the economy going: two models

Interruptions in the supply chains and a decline in sales can be observed internationally. After the federal government’s emergency aid programs, “we need to talk about how to get the economic cycle going again,” said Braun.

Esken wants family benefit and Corona child benefit. Especially in families in which both parents would have to work, one was at the limit due to the corona crisis, she said. She advocated a broad solution in June. After six weeks of wage replacement benefits for working parents under the Infection Protection Act, there should soon be a follow-up arrangement, explained Esken. However, this is not sufficient, she added. Funds for families which she proposed include a “family allowance of up to 300 Euros per family” so that parents can reduce their working hours. “Family allowance is made for this crisis,” Esken stated.

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