Angela Merkel has shown up Obama again, by beating him to skyrocketing electricity costs
Consumers pay directly for green energy through their bills. This year around 50% of an average bill will be made up of taxes and levies for renewables.
Critics of the energiewende have dubbed it the “energy bender”, a play on the German pronunciation. They say the plan is economic madness, with bill payers spending 18bn euros (£15bn; $23bn) every year on electricity with a market value of 3bn euros (£2.8bn; $3.8bn).
BBC News – Can Germany afford its ‘energy bender’ shift to green power?
Germany has high rates of taxation. Always has. That’s one of the reasons the German economy today is about the healthiest on earth. Everybody owes them money, not the other way around. And they use their tax revenues to maintain one of the world’s most comfortable standards of living. No worries, for instance, about medical bills ever.
They also manage to be able to maintain ultrahigh wage levels and still be able to sell their products to the world. The US would be so much better off if they could take a page or two from Germany’s book.
Germany isn’t burdened by the parasitic Obama 47% – who produce nothing and suck the life out of the economy.
Germany also lacks the Obama “no child gets ahead” school agenda.
Germany doesn’t throw people to the curb after their employers take their jobs away. Yes, that kind of service to the public does cost something.
But you raise a more pertinent question: just who is sucking all the money out of our economy? Is it (a) half the public, all the poor under- and unemployed people whose net worth stands at zero or below? Or is it (b) the financial sector, aided by the major corporations?
Last I saw, the two sectors I named were all sitting atop huge money vaults, like Scrooge McDuck. Simply put, now that they have it all, they have nothing more they need to invest in. Certainly not in jobs, of course. For them, employing other people costs money.
And as they have bought the government (both sides of the aisle) they now have to pay no taxes on that wealth. Does that not indicate who it was who “sucked the life out of the economy”?
Michael, your economic plan appears to be to find rich people, vilify and demonize them to turn public opinion against them, use the democratic process to gang up on them and take their money. That sounds great, but what happens when the rich people lose interest in being part of such a plan? Who do you go after next?
Typical whining Komrade slacker. The Rich people ate my homework!
Germans are choking on this wonderful system you think you love. And I know first hand that you can’t get in to see a doctor for MONTHS.
America doesn’t need loser babies crying in their sippy cup. Book yourself a one way ticket and don’t come back.
Joe, the point I am making is that in the USA, profit streams are aimed against the workforce and toward the investor class. So the mass of people get progressively marginalized. Finally, when consumer demand falls slack because there are so many fewer consumers, the thrust of our economic engine turns to the financial sector– where investors can make money off one another because they can’t make a living selling things to poor people.
That’s where we are now. And I’m not necessarily a big fan of taxation but we do desperately need to find a way of getting all that money (accrued profits) back onto the street where it can do some economic good– by stimulating more demand. Otherwise we just go back to the Middle Ages, with a very few lords and a great many serfs.
RE: michael – “the investor class” “very few lords and a great many serfs”
Pension funds, composed of the ‘great many serfs’ far outweigh the ‘very few lords’ in terms of total investment. Going after the largest funds is just going to hurt the little people.
http://www.agingsociety.org/agingsociety/publications/public_policy/300largest.pdf
Michael, of course profits go to the investors. Everything has a cost. Profit it the cost of capital, that is what people expect in return for temporarily allocating their resources to a business. If profits are too low, investors pull out what is left of their money and look elsewhere. And if profits are too high, new businesses form and move in to take advantage of them, which drives the profits downward. There is market pressure, in other words, to keep profits around a certain level. On average over a large number of industries that may be around 7 to 8%. Some industries will earn a higher rate (like ones that create new tech), and some lower (commodities).
Handing out money does not create demand. The economy is based on trade. I make something. You make something. We trade. We have a production problem. I’d start with reducing the size and burden of government.
Ben, it is somewhat terrifying to think that I worked extra hard all my life to have something extra to put away in savings, retirement, and health savings accounts, and here comes Michael out of nowhere demanding that he has more right to them than I do.
Michael, what is the purpose of Germany’s green energy scheme? From the BBC article, I couldn’t tell.
Here are a couple of advantages:
1) Independence from foreign oil & gas providers. Germany now has a positive trade balance– which the US does not. Energy costs form a large part of why this is so.
2) Renewability. In time, all nonrenewable sources will increase in cost due to the obvious laws of supply vs demand. Whereas the cost of renewables will drop until it reaches stability, then stay the same.
So, reducing CO2 doesn’t even make it to the shortlist.
I’m not sure I understand your point number 1. Germany paid $23 billion for $3.8 worth of electricity. Are you saying this is how to create a trade surplus?
Regarding 2, Germany’s green energy policy is proving to unsustainable, meaning it will mostly be for naught. The country is going to suffer a great opportunity cost because the time and money wasted on green energy could have been better spent elsewhere.
I’m also a bit surprised that you, knowing your dislike of the rich, would favor this policy. To support the subsidies, money is being forcibly taken from the larger population and given to a smaller group of people who can afford to install solar panels. The rich get richer at the expense of everyone else, all with your enthusiastic support.
Whereas the cost of renewables will drop until it reaches stability, then stay the same.
Until the maintenance/replacement bills start coming in – sooner than you think.
Germany thinks Coal is green energy too. It’s “Antique high quality biomass”. Excellent store of the sun’s energy.
http://mobile.bloomberg.com/news/2013-02-27/germany-to-add-most-coal-fired-plants-in-two-decades-iwr-says.html
RE: michael – “The US would be so much better off if they could take a page or two from Germany’s book.”
Germany would be much better off if they took a page from our book. We have had the highest nominal and per capita GPD since the late 1800s. Germany has now fallen from third to fourth.
http://en.wikipedia.org/wiki/Historical_list_of_ten_largest_countries_by_GDP
“…the United States has consistently had the world’s largest economy since the late nineteenth century, and by a margin that has generally widened over time…”
New data from the US Bureau of Labor Statistics shows an 85% increase in labor productivity since 1980, accompanied by 35% increase in real hourly compensation.
Germany experienced 22.6% productivity gains between 2003 and 2011 with flat wage growth.
We generate more wealth per worker than any other nation. We keep more after tax income than Germany. Our prices for goods and services are lower here.
Also see this chart, which shows living standards derived from average levels of individual consumption:
http://freedomandprosperity.org/wp-content/uploads/2012/08/aic-oecd-2010.jpg
Thanks Joe. Great chart
According to a German colleague of mine, the German healthcare system is very similar to Obamacare in that it mandates people buy health insurance. The less one earns though the less one is responsible for paying.
Reblogged this on The Firewall.
Capitol flows to the highest return. People invest when there is a need for a product or service. With unemployment at 50,000,000 there is little demand for products or services.
If you were a cynic you might conclude that Germany had persuaded the EU Commission in Brussels to impose similar mad renewable schemes on the rest of Europe just to remain competitive in the internal market of the EU.
That’s our “michael” all right. Industrial strength stuck on stupid.