The 400 euros of Zapatero are back

Now this tax incentive to promote domestic demand has returned in some countries. In the US, Donald Trump pays 1,200 dollars (1,029 euros) and 500 per child as a direct transfer to families. In Germany, the government of Angela Merkel, also conservative, announced a bonus of 200 euros per child in September and 100 in October as direct help to families to face the rigors of the crisis. In France, the executive launched in May a payment of 150 euros plus another 100 per child for four million households. And the then Prime Minister, Édouard Philippe, announced another 200 euros for 800,000 under-25s who lost their jobs or their internships.

The mayor of Vienna, Michael Ludwing, a Social Democrat, in May promoted a similar initiative for an amount of 50 euros for his neighbors to spend in the local hotel business. In Spain, Alberto Núñez Feijoo (PP) announced a very similar measure with health personnel for an amount of 250 euros.

Rodríguez Zapatero’s decision in 2008 was not original. It had been applied in the US by conservative George W. Buh in February 2002 after the technology crisis and the September 2001 attacks. Bush returned up to $ 600 to each taxpayer. It was, according to fellow Republican Alan Greenspan, then chairman of the Federal Reserve (Fed), “a short-term stimulus to shake the economy out of slumber.” In the crisis of 2008, Bush repeated the operation with the return of 300 dollars. At the Fed it was perceived that it “had helped the economy grow at a moderate pace at the beginning of the year,” wrote Greenspan’s successor Ben Bernanke before the September economic crash with the bankruptcy of Lehman Brothers.

In January and February 2008 the PP asked Zapatero in parliament: “Do not cross your arms in the face of the crisis. Do as Mr. Bush. Even if he is wrong ”. Zapatero promised the 400 euros in the March election campaign of that year but the PP radically opposed the decision, which it judged to be a wasteful expense, although it was, in fact, a tax cut, like those demanded then the popular ones.

In view of the immediate exit from the first recession (which occurred in the first quarter of 2010), the Socialist Government decided in September 2009 to abolish the refund on January 1. Rajoy, Cospedal, Montoro, González-Pons and Arenas attacked the Government for suppressing aid to families, which they called a tax increase. Rajoy reiterated this in Congress on November 7, 2011. And in a debate with Rubalcaba on April 9, 2014, Rajoy accused the PSOE of both distributing the 400 euros and having suppressed that social aid.

So it is highly likely that when the storm clears, not a few of those now demanding more public spending will rage against the resulting fiscal deficits.

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