How to Improve German Fiscal Policy Without Removing the Schuldenbremse

The debt brake is a pointless and harmful constraint. A new paper shows how to get around it without changing the federal constitution.

Much of Europe has been locked into decades of stagnation thanks to misguided ideas about how much governments should be allowed to spend and borrow. Instead of investing in growth and supporting household consumption, the public sector has systematically taxed too much and spent too little.¹

Those harmful ideas have supporters everywhere, but the most in…