http://news.bbc.co.uk/2/hi/europe/4449662.stm I'm a teenager. There's obviously many things I don't know. Perhaps there are some principals involved with this that I'm not aware of. However, this seems rather opposed to almost everything I've heard about economics. Obviously, the two main ways to stimulate the economy are to increase govt. spending, or to cut taxes so as to increase private spending. Usually, as in the Great Depression, defecit spending has been preferred, since an already sluggish economy wouldn't fair well with higher taxes to fund the public spending. Spending cuts are usually proposed so that taxes can be lowered to encourage increased private spending. So to me, the fact that the Germans want to hike taxes and cut spending, would seem to indicate that both Private and Pubilc expenditures will drop, and I don't see how this could be construed as a mean of revitalizing an economy. I suppose that if the German government gets its defecit under control, interest rates can be allowed to fall, and firms might be more inclined to invest in Germany, since it's government has itself under control. Is that the angle they're working? Because if so, it would seem that this would really be a process that would take many years for any noticable change to take place. Could someone more versed in economics explain if there's something I'm missing here, because it seems that the German government is just out of touch with basic economic principals to me.