{"id":1545625,"date":"2025-07-07T09:00:00","date_gmt":"2025-07-07T13:00:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1545625"},"modified":"2025-07-07T09:00:00","modified_gmt":"2025-07-07T13:00:00","slug":"germanys-pension-ponzi-scheme-is-collapsing-what-comes-next","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/germanys-pension-ponzi-scheme-is-collapsing-what-comes-next\/1545625\/","title":{"rendered":"Germany’s Pension Ponzi Scheme Is Collapsing: What Comes Next"},"content":{"rendered":"

Germany’s Pension Ponzi Scheme Is Collapsing: What Comes Next<\/span><\/p>\n

\n

Submitted by Thomas Kolbe<\/em><\/p>\n

If you\u2019ve ever wanted to witness the slow-motion collapse of a Ponzi scheme, you might want to keep an eye on Germany\u2019s public pension system.<\/p>\n

Rhetorically and politically sugar-coated as a \u201cpay-as-you-go\u201d system \u2014 where today\u2019s workers finance the retirement of yesterday\u2019s \u2014 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.<\/p>\n

Just in time for this demographic crunch \u2014 declining birth rates, increasing life expectancy, and longer pension payout durations \u2014 policymakers have decided to torch what\u2019s left of the country\u2019s industrial foundation in a green frenzy. Year after year, around \u20ac70 billion in value creation is being sent up the chimney, while more than half a million jobs have disappeared in recent years. That\u2019s half a million fewer contributors to the pension Ponzi.<\/p>\n

Tax Payer\u00b4s Money To Maintain The Illusion<\/strong><\/p>\n

To keep the locomotive rolling \u2014 even as it barrels in the wrong direction \u2014 the federal government now plugs the pension system\u2019s gaping cash hole with roughly <\/a>\u20ac123 billion<\/strong><\/a> 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.<\/p>\n

With a government spending ratio<\/a> now exceeding 50% of GDP<\/strong>, Germany has erected a full-scale hyperstate<\/strong>. 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\u2019 self-destructive Green Deal.<\/p>\n

The coming deep economic depression<\/strong>, which has been foreshadowed by three years of quasi-permanent recession, will test just how resilient \u2014 and solvent \u2014 the savings and wealth accumulation of past generations truly are. It may be their prudence that softens the blow of the present generation\u2019s green delirium.<\/p>\n

Trapped in the Logic of a Ponzi Scheme and Keynesian Voodoo Economics<\/strong><\/p>\n

Entirely captive to the logic of Ponzi finance and Keynesian voodoo economics, Germany\u2019s new federal government now plans its grand escape from all woes. With a debt hammer<\/strong> of one trillion euros<\/strong> over the coming years, it aims to wipe away every problem while putting the economy back on track.<\/p>\n

Broadly speaking, the money is supposed to raise the defense budget to 5% of GDP<\/strong>, as demanded by the latest NATO summit<\/a>, pour into the country\u2019s crumbling infrastructure, and plug countless holes in the overstrained welfare apparatus.<\/p>\n

We don\u2019t need to go into detail here to recall that such stimulus-fueled bonfires<\/strong> leave behind nothing but more debt and inflation<\/strong>, misallocating printed capital into sectors with little or no real demand. It would suffice if politicians had even a passing familiarity with recent economic history \u2014 they\u2019d realize they are once again slamming their heads against the very same wall<\/strong> as in decades past.<\/p>\n

Socialists Debate Higher Contribution<\/strong><\/p>\n

Meanwhile, the SPD \u2014 junior coalition partner to Chancellor Friedrich Merz\u2019s CDU-led government \u2014 is currently debating raising the pension contribution<\/a> ceiling by \u20ac500 to \u20ac8,050 monthly salary<\/strong>. This increase would translate to an additional yearly burden of over \u20ac1,116<\/strong> for anyone earning that amount. In other words, those who already carry the lion\u2019s share of the country\u2019s fiscal load as the last remaining productive pillars of society would be hit with yet another surcharge. The welfare state and social peace, they argue, are worth this sacrifice.<\/p>\n

The coalition partner CDU\u2019s reaction was not long in coming. There was unanimous rejection of the SPD proposal to once again burden the country\u2019s top earners. Wolfgang Steiger, Secretary General of the CDU\u2019s Economic Council, stated:<\/p>\n

\u201cWe strictly oppose the move to raise the contribution ceiling in statutory health insurance. It would further increase the cost of labor.\u201d<\/em><\/p>\n

That sounds good at first and has its merits. After all, it\u2019s about time fiscal policy wielded the Milei chainsaw<\/strong> instead of continuing with the socialist cornucopia. Yet recent history has shown us that the CDU flips positions faster than expected.<\/p>\n

It is, not least, Chancellor Friedrich Merz\u2019s fault that trust in his party has hit rock bottom. After multiple broken campaign promises \u2014 like cutting the electricity tax or securing the country\u2019s external borders once and for all \u2014 no one believes his party anymore.<\/p>\n

After all, the community, acting as a global social welfare office, also needs to provide compensatory payments across other social insurance branches \u2014 which, thanks to successful recruitment efforts related to illegal migration<\/strong>, are facing significant special financing needs.<\/p>\n

Germany is the Victim of Its Own Success<\/strong><\/p>\n

Two successful postwar generations built the capital and economic foundation on which the neo-socialist aberration could flourish \u2014 manifesting itself in an overgrown welfare system.<\/p>\n

At the root of the problem lies not only the crushing tax and contribution burden<\/strong> in Germany but also its stagnating productivity<\/strong>, which together make rapid private capital formation nearly impossible for large parts of the population.<\/p>\n

Even though politicians occasionally flirt with the idea of introducing elements of a capital-funded pension system, such proposals are a suicide mission in light of the sheer weight of the public pay-as-you-go system. Germans hold almost exclusively cash-based savings<\/strong>, which makes them highly vulnerable<\/strong> whenever the state \u2014 in concert with the ECB \u2014 fires up the inflation engine<\/strong>. On top of that, they remain deeply risk-averse investors<\/strong>, culturally and historically allergic to equity markets or private pension schemes.<\/p>\n

Powerful Voting Block<\/strong><\/p>\n

The pension insurance provides the perfect case study. With over 21 million pension recipients, every reform attempt at the expense of this group faces a homogeneous voting block. Germany could raise the retirement age, which it is attempting to do to 67 years. It could reduce benefits, which it does not. Pensions are tied to inflation and productivity growth in the economy.<\/p>\n

Politicians could reject the green-socialist agenda and return to the economic rationality of the free market to expand the contributor base and attract investment. They do not. The bureaucracy \u2014 the political front organization \u2014 is simply too powerful. Regulation is its product, and additional welfare recipients are its customers.<\/p>\n

The path of least resistance will be taken: further increasing contribution rates for the productive pillars. Federal subsidies from the tax pool will supplement this to ease the pressure. But due to demographic development and the destructive economic policies in the EU, especially in Germany, the Ponzi scheme is steering toward an abyss.<\/p>\n

* * *\u00a0<\/p>\n

About the author: <\/strong>for over 25 years, Thomas Kolbe has worked as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.<\/em><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nMon, 07\/07\/2025 – 05:00<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/germanys-pension-ponzi-scheme-collapsing-what-comes-next<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Germany’s Pension Ponzi Scheme Is Collapsing: What Comes Next Submitted by Thomas Kolbe If you\u2019ve ever wanted to witness the slow-motion collapse of a Ponzi…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1545625","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1545625","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1545625"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1545625\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1545625"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1545625"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1545625"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}