High lev­els of pub­lic debt result in social and inter­gen­er­a­tional redis­tri­b­u­tion. The inter­est financed by the gen­er­al pub­lic goes to the more afflu­ent cap­i­tal own­ers. At the same time, each new gov­ern­ment has less and less finan­cial lee­way to active­ly shape soci­ety and not just man­age the short­age.

The aim of an inter­gen­er­a­tional fis­cal pol­i­cy is an equi­table dis­tri­b­u­tion of the bur­den between the gen­er­a­tions. This does not have to mean com­plete repay­ment of the nation­al debt or an absolute ban on indebt­ed­ness. What needs to be dif­fer­en­ti­at­ed is how pub­lic debt can be reduced through a dual strat­e­gy of less expen­di­ture and high­er rev­enues.

A gen­er­a­tion may not con­sume more cap­i­tal (of all kinds) through its finan­cial pol­i­cy than it is regen­er­at­ing. If pos­si­ble, it should improve the over­all gen­er­a­tion bal­ance, i.e. leave more behind than it itself received from its pre­de­ces­sor gen­er­a­tion. This con­cerns not only finan­cial assets, but also on envi­ron­men­tal cap­i­tal, etc. An inter­gen­er­a­tional fis­cal pol­i­cy must start on both the rev­enue and the expen­di­ture side: through smart sav­ings on the one hand and an intel­li­gent increase in rev­enues on the oth­er. In addi­tion, Ger­man polit­i­cal actors must apply the debt brake intro­duced in 2009. This was the first seri­ous step towards lim­it­ing pub­lic debt in Ger­many, after gov­ern­ments, par­lia­ments and courts have ignored the long-term con­se­quences for com­ing gen­er­a­tions for many years.

It now depends on how the new rules are imple­ment­ed at fed­er­al and state lev­el and effec­tu­at­ed in bud­get pol­i­cy. The FRFG will crit­i­cal­ly and con­struc­tive­ly accom­pa­ny this process.