If you’ve ever wanted to witness the slow-motion collapse of a Ponzi scheme, you might want to keep an eye on Germany’s public pension system.
Rhetorically and politically sugar-coated as a “pay-as-you-go” system — where today’s workers finance the retirement of yesterday’s — this bureaucratic redistribution leviathan is utterly dependent on an ever-growing pool of contributors. Problem is: Germany is aging, shrinking, and losing its industrial base.
Just in time for this demographic crunch — declining birth rates, increasing life expectancy, and longer pension payout durations — policymakers have decided to torch what’s left of the country’s industrial foundation in a green frenzy. Year after year, around €70 billion in value creation is being sent up the chimney, while more than half a million jobs have disappeared in recent years. That’s half a million fewer contributors to the pension Ponzi.
Tax Payer´s Money To Maintain The Illusion
To keep the locomotive rolling — even as it barrels in the wrong direction — the federal government now plugs the pension system’s gaping cash hole with roughly €123 billion annually from the general budget. In other words: workers pay a second time, in the form of taxes, to support the same unsustainable system they already fund through record-high payroll deductions.
With a government spending ratio now exceeding 50% of GDP, Germany has erected a full-scale hyperstate. Attached to its bloated bureaucracy are ever-growing administrative tentacles: layers of social insurance agencies and subsidized institutions now serving as the domestic enforcement arm of Brussels’ self-destructive Green Deal.
The coming deep economic depression, which has been foreshadowed by three years of quasi-permanent recession, will test just how resilient — and solvent — the savings and wealth accumulation of past generations truly are. It may be their prudence that softens the blow of the present generation’s green delirium.
Trapped in the Logic of a Ponzi Scheme and Keynesian Voodoo Economics
Entirely captive to the logic of Ponzi finance and Keynesian voodoo economics, Germany’s new federal government now plans its grand escape from all woes. With a debt hammer of one trillion euros over the coming years, it aims to wipe away every problem while putting the economy back on track.
Broadly speaking, the money is supposed to raise the defense budget to 5% of GDP, as demanded by the latest NATO summit, pour into the country’s crumbling infrastructure, and plug countless holes in the overstrained welfare apparatus.
