What Stuttgart train station tells us about the global economy

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I’m in Stuttgart in southwestern Germany, and everyone here is all worked up over the fate of the local train station. The government plans on demolishing the building, one of the few in this prosperous industrial town to have survived the devastation of World War II, and moving the station underground. An entire new neighborhood would emerge above it. The plan, called Stuttgart 21, is designed to improve the rail transport system by allowing the tracks to more easily pass through the city center. You’d think that urban dwellers anywhere would welcome more efficient transport and government infrastructure spending, but not the citizens of Stuttgart. A quite virulent protest movement against the government’s designs has emerged, with tens of thousands of angry locals amassing at the old station. A fence outside has become covered with posters condemning the project, which one avid protestor told me is “more important than the Berlin Wall.” The entire nation was shocked when the protests degenerated into violence in late September, with police turning water cannons on the restive throng, injuring scores of protestors, including the elderly and young students.

What, you’re probably asking, does all this have to do with me? I think this kerfuffle over the Stuttgart train station gives us a peek at what is likely to be an increasingly important element in the political scene of the industrialized world – greater debate over and public involvement in the allocation of taxpayer money.

There are several reasons why the folks in Stuttgart are so opposed to the demolition of the old train station. There’s an understandable attachment to the building’s history. Stuttgart, I have to admit, isn’t one of the more attractive locales in Germany and probably needs all of the older buildings it can keep upright. I also sense that the movement to save the station is an outgrowth of rising dissatisfaction with the administration of Chancellor Angela Merkel, a feeling that she and her ministers are not responsive enough to the concerns of the public.

But for our purposes here on Curious Capitalist, the more interesting argument made against the Stuttgart 21 project concerns money. Those opposed believe the price tag, of about $5.7 billion, is simply too big, and the benefits too few to justify the expense. They argue there are all kinds of other ways such funds could be used that would help the city much more. Students think that the money could be better spent on education or fixing the city’s dilapidated schools. Others believe employing it towards fixing up the area’s highways would boost the efficiency of local transport more than a reorganized rail system. A poster tacked up on the protest wall declares Stuttgart 21 as “a grave for taxes.”

The government insists on going ahead with the project, despite the rising anger in Stuttgart, saying it is a necessary part of an upgrade of the nation’s railways. I’m not going to take a side in the argument over the train station. But I can imagine Stuttgart-like debates taking place around the developed world more and more, especially as we enter an era of intensified public austerity. As governments struggle to reduce budget deficits and stabilize debt levels, from Washington to Athens to Tokyo, elected leaders are going to face tougher and tougher decisions on where and how to spend the money still available. That’s likely to lead to Stuttgart-like protests over those decisions, placing added pressure on strained democratic systems.

We’ve already seen elements of this widening debate. In Europe, disagreements between politicians and the public are emerging over the sustainability of the welfare state. Violent protests erupted in Greece earlier this year after the government was forced to cut civil service pay and other benefits. Protests in France have exploded over a proposal to raise the retirement age, and thus the age at which the French could tap into government retirement benefits. In the U.S., there is escalating agitation over the yawning budget deficit, how to reduce it, and how to spend what’s left. New York City and other towns have seen protests over school closing, made necessary due to a lack of funds. The dissatisfaction fueling the raucous Tea Party is in part a result of heightened concerns over America’s rising deficits and government debt, and the perception that politicians are wasting the public’s money.

I can only imagine that the disagreements over the use of taxpayer funds will escalate further in coming months and years. There is little doubt that government spending in the advanced economies is going to go down, whether out of desperation (in Ireland, for example, with its budget deficit at 32% of GDP); demographic trends (the aging societies that make European welfare states more costly); or overstretched obligations (can, or should, the U.S. fund the war in Afghanistan and healthcare reform?). In many cases, these budget decisions are coming as the recovery from the Great Recession remains anemic, at best, making the potential cuts even more painful. States will be withdrawing public services that people have come to count on, or they feel they have a right to, after years of paying their sometimes very high tax obligations.

The choices made by elected leaders in regard to public spending and budget cuts will impact how people retire, save and spend, get healthcare and, in Stuttgart’s case, use public transportation. Inevitably, the citizens of the richest countries are facing higher taxes. And, in the spirit of the old Boston Tea Party, they should have greater say in how that increasingly precious money gets spent. Perhaps the residents of Stuttgart may end up losing their battle to save their train station – and taxpayer money with it. But it’s just one battle in a greater war.