Germany's Path of Self-Harm: Militarized Keynesianism in Action

Written on March 24, 2025

Germany's Path of Self-Harm: Militarized Keynesianism in Action

Germany, once a paragon of economic restraint and cautious fiscal policy, is now marching toward national self-harm under the banner of rearmament, war hysteria, and massive debt. At the heart of this transformation is a deeply ironic shift: the country that used to obsess over avoiding public debt is now embracing it — but not to invest in its people, infrastructure, or entrepreneurs. Instead, it's committing to what can only be described as militarized Keynesianism: using deficit spending to prop up defense, intelligence, and NATO logistical ambitions under the guise of facing an imminent Russian threat.

Historian Tarik Cyril Amar, writing from Istanbul, lays out a sharp critique of this trajectory. In his analysis, Germany’s embrace of rearmament and war-related spending eerily mirrors the 1930s — the very era Germans have long claimed to fear repeating. The old German obsession with Weimar hyperinflation has seemingly evaporated, now that war is back on the menu. Austerity is dead — but only because the elites have redefined emergency spending to include everything from tanks to military-grade train lines.

Germany plans to rack up over a trillion euros in new debt, with at least three major spending avenues:

1. 1. Scrapping the debt brake for defense: A constitutionally fixed limit on debt is being suspended to unleash a massive rearmament program, including military aid to Ukraine, civil defense upgrades, and expanded intelligence services.

1. 2. €500 billion in infrastructure and climate investments over 12 years: While some of this may benefit Germany’s failing railways and bridges, much of the motivation is military. German roads and rail are once again seen as logistics networks for troop movements.

1. 3. State-level debt expansion: Germany’s federal states will also be empowered to take on more debt, further bloating the national balance sheet.

Meanwhile, the media and political class are saturated with Russophobia and war hysteria. Daily talk shows, expert panels, and even state broadcasts push the idea that war with Russia is just around the corner. According to Amar, many of these so-called experts — like Carlo Masala, Soenke Neitzel, Gustav Gressel, and Claudia Major — have a perfect track record of being wrong, yet continue to dominate the discourse. The atmosphere, he says, is self-hystericizing, a self-fulfilling doomsday cult.

This isn’t just an economic mistake. It’s also a democratic failure. Chancellor-elect Friedrich Merz forced the debt package through with the outgoing parliament, bypassing the newly elected one. Even if technically legal, it violates the spirit of democratic accountability. Meanwhile, the Green Party and Social Democrats — supposedly progressive forces — have gone along with it.

The tragedy is that Germany does, in fact, need Keynesian spending — just not like this. Instead of building a war economy, Germany should:

• Support small entrepreneurs: Cut taxes and energy costs. Remove excessive bureaucracy. Make it easier to build and create.
• Lower the burden on workers and employers: Give the middle class and small business owners some breathing room.
• Help farmers: Protect domestic food production and end the war on rural communities under the guise of green policy.
• Rethink immigration: Adopt a controlled, merit-based system like Israel's — not open-door ideology that strains services and social cohesion.

These steps would actually revive the German economy and rebuild national resilience. Instead, Germany is choosing to gamble its future on an arms race and funnel money into Ukraine — a country that, as Amar bluntly states, is neither democratic nor uncorrupt. The belief that these investments will yield economic gain is delusional. As Amar warns, military spending is not productive in the classical Keynesian sense. It's dead-end economics.

There may still be time. The spending plan spans more than a decade. The war scare could cool. Russia may not attack. Some German corporations may quietly rebel against sanctions when U.S. firms start re-entering the Russian market.

But right now, Germany is set on a path that history shows does not end well. This is not just about economics or foreign policy. It is about the survival of a sane, democratic, and sovereign Germany. And if the political class refuses to change course, the people may eventually be forced to do it themselves.