Poverty Discussion

It was an interesting piece last night on ZDF (German public TV, Channel Two), and centered on poverty in Germany.

Roughly 12.8-million Germans are considered in a poverty state at present....around 15-percent of the population.

The majority or location?  That gets to an interesting topic.  On their site, they put the map up and it's obvious that Bavaria has the least of the issue (11.7-percent), and the state of Mecklenburg (way up on the NE coast) has the bulk....near 21-percent of the public. 

So here's the odd factor....for the past decade, if you follow the data....the economy of Germany overall grew.  No one can complain about that fact.  But at the same time.....poverty grew.

The discussion here now becomes....if jobs and a robust economy aren't part of the factors to prevent poverty....then what is?  The suggestion is that you will have to tax more, and redistribute capital....to lessen poverty, and jobs simply aren't part of this equation or the answer ahead.

For a lot of Germans, economists, political figures, and think-tanks....this is going to create a serious problem on the path ahead. 

The question now is....can you create some type of taxation game or redistribution situation, where the states of Bavaria and Baden-Wurttemberg are given less sums of money, and the three states in serious poverty (Mecklenburg, Sachsen, and NRW) are bumped up on redistribution?  And if you bumped the poverty folks up....would their lives improve?

A lot of this discussion centers around education, job-training, and a robust atmosphere for jobs to exist.  Logic held (maybe going back to even the era after WW II....say the 1950s) that if jobs existed and decent pay was part of the system, then poverty wouldn't be a factor.  Are we now admitting that the standard rules in place for seventy years won't work?

A lot of this discussion will go back to the Konigstein 'key'....a formula devised devised in 1949 to funnel national funding to the German states under a 'fairness' umbrella.  The factor was a ratio of sorts....involving the tax revenue that you generated as a state, and the population of your state.  The more the revenue generated or the more added to your population....the better your circumstances within the 'key' structure.

So to bring up this entire redistribution chatter......you have to bring up the Konigstein 'key' and admit it's faulty nature, and basically throw out the ratio of tax revenue and population.  The odds of the sixteen states agreeing to this? ZERO.

Just in the past two years, Hessen, Bavaria and Baden-Wurttemberg went to court and argued that they were putting billions into the national pot of tax revenue, and not getting a fair scale of the money back.  To settle this matter and avoid the court messing up things....the federal government agreed to some slight variation....giving the three slightly more (just enough to make them go away).

Here's the thing, which you have to go and consider.....as much as you see Germany as one single nation....it's really a federated system with sixteen states, and they simply aren't equal....nor were they ever equal.  It's the plain blunt truth.

Bavaria, Hessen and Baden-Wurttemberg could go and exit the federation today....become their own country, and probably have the highest revenue generating system of any country in Europe, and the remaining 13 German states would quickly sink and be at a lesser point. 

This poverty discussion isn't about to go away, but it lacks any path to changing or correcting itself.