Germany is the only euro-area country that already has a constitutional provision governing deficits — and sure enough, it contains an exception big enough to drive a truck through. Adopted in 2009, Germany’s “golden rule” or “debt brake” requires that by 2016, the federal deficit not exceed 35 percent of gross domestic product. But the same provision says that the government “may introduce rules intended to take into account the effects of market developments that deviate from normal conditions.”(h/t MR)
Thursday, September 1, 2011
Feldman on the "Golden Rule"
Noah Feldman on why Sarko's newest pet project, the budgetary Golden Rule, is such a crock of nonsense: