Germany is facing an imminent crisis in its pension system. In this it is hardly alone — throughout the West pension systems are severely underfunded. When unfunded U.S. federal, state, municipal, and corporate pension obligations are added together, the total is catastrophically high. I’ve seen estimates of $14 trillion, and I’m sure the number is continuing to rise.
Many thanks to Hellequin GB for translating this article from Ansage.org:
The Gray Bomb: the Collapse of the Pension System is Imminent
In view of the current large-scale mass abuse of basic security by potentially every legal or illegal “refugee”, the fact that the pension system is the first to implode is perhaps surprising. However, the sheer volume of pension payments make up for it (expenditures in 2021: €341 billion, of which €78 billion must now be borne by tax-financed federal grants!) and the unstoppable mathematical fact of a fatal demographic aging trend make the pension system the ultimate time bomb. And it is very likely that this will detonate before the collapse of social assistance, which will soon be euphemized as “citizen’s allowance”.
The alarming latest statements by the German Employers’ Association president Rainer Dulger, who warns in drastic terms of an “imminent collapse of the pension system”, point in precisely this direction. Dulger also sees the potential for the final division of society in the planned “citizen’s allowance”: It cannot be that some of the people who go to work in the morning have just as much or just a little more money available than someone who doesn’t has to get up and go to work in the morning at all. What is needed is “a major social reform that has the dimensions of economic, monetary and social union after reunification,” Dulger told Bild.
Five years until the meltdown
Dulger named the next five years as the window of time when the statutory pension funds would reach their limit, after which the costs would ultimately explode and would no longer be manageable. There is hardly any time left to prevent the “welfare state eating up the future” scenario from becoming a reality. The most urgent thing is an immediate “reorganization of old-age provisions” including a fundamentally new financing model for the pension system.
Although Dulger’s suggestion is not popular, it is the only realistic way: The retirement age must finally be linked to life expectancy. “It must not be that the increasing life expectancy leads to an ever longer retirement,” says the Heidelberg entrepreneur. In order to make the importance of the topic clear, “social policy needs forecasts like climate policy,” Dulger continued: the federal government should report regularly on the future development of social security contributions. “This makes the pressure to act visible to everyone. The reform of the social security systems is similar to the energy transition as a challenge.” As far as the invoked “intergenerational justice” is concerned, it is without a doubt at least as important in the case of old-age provision.
Afterword from the translator:
The money from the pension fund is not gone. It’s just in someone else’s pocket. But it doesn’t matter; the pensioners just have to collect a few more bottles. They’re already used to it so that the enrichers of their culture don’t need to work and pay into the pension fund, as was stated by Merkel and her ilk.
On the other hand, this collapse is only the consequence of decades of over-exploitation of the pension insurance system, which was systematically plundered and misused. This large-scale embezzlement began at the latest in the early 1990s and has continued increasingly unchecked since then. No wonder that Gerhard Schröder, while Chancellor, stopped the “Die Teufelsliste” (Devils List) or “Rentenklau Tabelle” (Pension Steal Table) .In all years in which a calculation/extrapolation/estimate was made by the DRV (German Federal Pension Insurance), the proportion of non-insurance benefits in total pension expenditure was between 34% and 40%. In contrast, the proportion of federal funds made available for this purpose has been between 26% and 27% for years, resulting in a deficit of €909 billion, which is growing with the pension expenditures, at the expense of the insured and pensioners. Together with demographic developments, this is now bringing about the planned catastrophe for the peasants. This will be delayed a little longer by continuing to run the money-printing press, because the political system would hardly survive if pension payments were stopped or reduced. Will a “Soylent Green” scenario be next?