Can’t we all be Swabian Housewives?
There is probably no economic fallacy that is so difficult to correct than that of Swabian hausfrau economics (you can only spend what you have) having no relevance with regard to public finance. Angela Merkel made the Swabian housewife a byword for fiscal responsibility in 2008, when at the height of the financial crisis, she ruled out using tax cuts to stimulate the German economy, saying that “we should ask a Swabian housewife: in the long run, you cannot live beyond your means”. Swabian frugality has been an emblem of responsible fiscal management ever since.
So what’s the basic recipe of the Swabian housewife? It’s to spend less than you earn, and when you buy, to buy quality.