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.