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It looks as if President Obama and Congress could take a few economics lessons from Chancellor Angela Merkel. While the US is going to try to spend her way out of the financial crisis by putting more taxes on the American people to finance the stimulus package, Chancellor Merkel has opted for the path less-traveled—the more laissez-faire path that is. Although hardly a perfect model (Germany did spend billions of euros to bail out her banks), Chancellor Merkel is not going to implement higher taxes in an attempt to fix the economy. With elections on the horizon and a projection of a 6% drop in GDP, the Chancellor is getting serious about making economic growth her priority.
"Germany needs to move quickly out of the crisis," Merkel said. "To do that we need tax breaks, not hikes." [Business Week]
Since Germany is Europe’s largest economy, this move by Chancellor Merkel could set a great example. And definitely one that Congress should take note of.