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» Economics » Realm finances (term) » Topics begins with D » Deflationary policy

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The deflationary policy was characteristic for the economic policy of Heinrich during the world economic crisis. He was the first realm chancellor of a in the Weimar Republic. This politics were characterized by a strict budget reorganization. It came thus to sinking prices and a deflation. The goal was a "shrinking to profitable size" of the German economy, by which lower prices should German products on the world market attractively and the export are set in motion.


By emergency decrees the direct taxes to wages, incomes and conversions and above all the indirect taxes were increased like the taxes to sugars, beer and tobacco. In addition the social expenditures as well as the wages and salaries in the public service were lowered. In the autumn 1931 the government intensified the deflation by nationally specified wage, price and renting lowerings again consciously. From these measures the realm resistance and because of Hindenburg up to the spring 1932 also those were spared to a large extent bankruptcies ostelbische large agriculture. When planned auctions by order of the court here for the settlement of unemployed persons, he became from Hindenburg to dismiss.

Reasons for the deflationary policy

The principal reason for the deflationary policy is today disputed until. The older research was convinced to eliminate principal purpose to overcome not the crisis had been but Germany Reparationsverpflichtungen. It wanted to fulfill the allied one to show that Germany could not gain the foreign exchange necessary for the Reparationstransfer despite the extreme efforts no more, and wanted in addition the demands of the Young plan after currency stability. Younger researchers believe against the fact that believed and its coworkers honestly that there was no alternative to its politics. Thus the revision of the Reparationsverpflichtungen does not come as motive of the deflationary policy remarkable-proves only into public speeches of the chancellor and its coworkers forwards, in the internal discussions against it plays the reparations designation meadow an outstanding role.

Against this opinion it speaks that there was the WTB plan prepared by Social Democrats, which planned expenditures at a value of 2 billion, from whom half by positive effects of the plan like more tax receipts be financed could.

A further reason was completely reliably the fear in Germany before an inflation after the bad experiences (see: German inflation 1914 to 1923).

Criticism at the deflationary policy

The loads of the deflationary policy were unequally distributed: While humans with firm employment due to the partly dramatically sinking prices could hold their real income to a large extent (even if they believed themselves because of the sinking nominal wages disadvantaged) and capitals owner profited, suffered in particular easily subject to notice employees and unemployed person under the crisis, which itself by the policy of the government continuously intensified. It operated a per-cyclic economic policy: The state lowered its expenditures in an economic situation crisis and aggravated these thereby. The anticyclical economic policy of John May pool of broadcasting corporations Keynes was also in Germany already admits and after the bank crisis in July 1931 submitted independently a president of the statistic office for realm Ernst Wagemann and the chairman of the combination company of Rheini brown coal works Paul Silverberg plans in this direction, whereas the daring man plan and the Silverberg plan planned an anticyclical economic policy in the form of inflation as incentive for growth, steered representatives of the trade unions and Social Democrats in the WTB plan so mentioned (after the authors Vladimir Woytinsky, Fritz Tarnow and Fritz Baade designated) from January 1932 their focus on the long-term discharge of the treasury and the short term for the economic development by substantial work-providing measures. Since did not convert all these plans for different reasons (among other things fear of inflation and a goal of the balanced household), they by the right-wing extremists parties could be used against him. The demand for credit expansion was 1931 to 1932 particularly with the Nazis common. scope of action was to all appearances strongly reduced and the possibility of an anticyclical economic policy in the world economic crisis is therefore until today extraordinarily disputed.

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