Crippling Over-bureaucratization
One significant problem that is hindering all initiatives is the country’s paralyzing over-bureaucratization. “Let’s begin with our legislation,” wrote CDU politician Rupert Scholz. “Whereas only 612 draft bills were introduced at the federal level in the tenth election period (1983-1987), 895 were introduced in the twelfth (1990-1994), and there have already been almost 600 in the current period. Nearly 2,000 federal laws and almost 3,000 federal ordinances with around 85,000 individual rules reflect the extent of our legislative overregulation and therefore also reflect the overwhelming demands on society. We need to quickly bid farewell to the omnipresent legislator.” Helmut Schmidt also spoke of “excessive state control through thousands and thousands of government regulations”; the texts of the laws of the Federal Republic alone comprise more than 80,000 pages. The building law alone is a jungle of legal red tape, which of course invites corruption. We are in the grips of a regulatory mania that threatens to squeeze the life out of everything.
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State Finances in Crisis
The crisis facing the welfare state is most apparent in the disastrous condition of our state finances. The indebtedness of public funds rose from 20 to 900 billion marks between 1949 and 1989. In the following six years, the public debt doubled. In 1996, federal finance minister Theo Waigel took out loans amounting to roughly 195 billion marks. The lion’s share of that, 135 billion marks, was not designated for the federal budget, but rather to pay back earlier loans. But even the new net debt grew in 1996 to 78.3 billion marks, which was 18.4 billion marks more than provided for in the budget plan. The debt ratio (based on the GNP) rose from 41 percent in 1989 to 60.5 percent by the end of 1996 – and for the first time exceeded the permissible limit as determined by Maastricht criteria. Debt service is correspondingly high: The federal interest burden is growing and growing. In 1990, barely 35 billion still sufficed to service the debt. In 1996, the federal finance minister reckoned with interest payments of 53.8 billion marks. That is almost twelve percent of the overall expenditures of the federal government. And the burden will continue to increase in the coming years because the federal government accrues new debt year after year (in December 1996, the mountain of debt amounted to almost 800 billion marks), so the interest burden also grows accordingly. According to calculations presented by Waigel in his medium-term financial plan in late 1996, interest payments in 2000 will amount to a good 68 billion marks. One in seven marks spent by the federal government will go toward debt service. If we add state and local government debt to that, the sum doubles, i.e., far more than 100 billion marks, just for interest!
Welfare state expenditures for 1996 amounted to about one-third of the overall national output in Eastern and Western Germany. “Our state still spends one in three marks on social welfare,” boasted Norbert Blüm in June 1996 before the Bundestag, and he added proudly, “That happens almost nowhere else in the world anymore.”
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