Thursday, August 05, 2004
I thought Germans prized thrift
Gerhard Schroder is attempting a much-needed overhaul of Germany's welfare system. But on this proposal he goes astray: a cut in welfare benefits to children of unemployed parents who have 750 Euros in a savings account.
To the extent the policy would have teeth, it diminishes the incentive of people in at-risk jobs to save. Not good. But more likely, it will just limit the form of saving, and poor Germans will revert to sticking cash under mattresses. Nice one, Gerhard!
To the extent the policy would have teeth, it diminishes the incentive of people in at-risk jobs to save. Not good. But more likely, it will just limit the form of saving, and poor Germans will revert to sticking cash under mattresses. Nice one, Gerhard!
