Stock pension: Lindner lacks economic knowledge for pension reform

The SPD and Alliance90/The Greens are neoliberal parties. At least the FDP is honest and openly supports neoliberalism. Now the traffic light is topping its neoliberal madness with a “stock pension,” which has been renamed “generational capital” because of the disreputable nature of the term. The statutory old-age pension with a solidarity-based pay-as-you-go system for almost 22 million pensioners must be further transformed into funded financing, as was the case with the four percent “Riester pension”. To this end, the government, which will be voted out in two years, is planning another serious intervention in the pension system.

Enough with these so-called representatives of the people. The people should decide on old age pensions. Overall, it has more economic knowledge than any government that has not even understood the counterproductive macroeconomic effects of the national debt brake. Apparently she didn’t understand the Mackenroth theorem with regard to pensions, even though Gerhard Mackenroth left us everything we needed about it in 1952: “Now the simple and clear statement applies that all social expenses must always be covered by the national income of the current period . There is no other source (…), there is no accumulation from period to period, no “saving” in the private sector sense, there is simply nothing other than current national income as a source for social expenditure (…). In economic terms, there is always only one pay-as-you-go system.«

The “father” of the “intergenerational contract” and the “dynamic pension,” Wilfried Schreiber, wrote as early as 1955: “Behind the demand to go back to the insurance principle, there is often something more, namely the demand for further slavish adherence to private procedures Insurance industry. Apparently a large group of our experts lack the imagination to break away from the private sector model (…). This is the only way to explain that the opinion is widespread, especially among experts, that in order to be ‘healthy’, employees’ pension insurance requires the accumulation of ‘cover capital’.”

Now, despite the economic principles, the traffic light seriously wants to make annual payments into a fund with which fund managers can then realize returns on the capital market. The fund is expected to grow to 200 billion euros by 2035. Finance Minister Christian Lindner (FDP) wants to pay 12 billion euros into the fund this year. But since he doesn’t have the money, he will go into debt.

He sees this national debt outside the limits of the debt brake. There is a risk of another constitutional lawsuit, but Lindner is already familiar with that. And the fact that he will have to pay interest on the loans taken out, which can hardly be expected to produce a real net return, does not bother the finance minister and his neoliberal advisors. There is simply a lack of economic knowledge here.

Even if one assumes that everyone could prepare for old age through individual savings or capital accumulation – which in reality most dependent employees cannot do due to their low income from work – from a macroeconomic perspective this saving would only remain a zero-sum game. Because if everyone saves, no one has more. Just as someone can only get into debt if they find a creditor, only someone who finds a debtor or investor can invest money and build up assets (save). The returns from accumulated assets (such as interest and dividends) that flow to savers must be earned by those economically active and are always only part of the current national income.

The economist, physicist and philosopher Stefan Welzk sums up these economic causalities, which a finance minister should have understood: “General, funded private provision to mitigate the economic consequences of the demographic aging process is ineffective (…). Economically, it does not bring any increase in prosperity compared to a pension system financed by contributions. Of course, it causes a redistribution in favor of profits and at the expense of wages, as well as a huge gap in retirement incomes.

On the other hand, if you want to ensure statutory pension insurance not only at the modest level that exists today – the average gross monthly pension was 1,247 euros in 2023 – but also improve or expand it sustainably, there is a simple economic solution: the added value in value creation (national income) must be in favor of labor income are redistributed. This is not a problem at all with an added value in 2023 of 1,254.5 billion euros and an added value ratio of 40.7 percent. The only problem is the neoliberal governments of the last 50 years in Germany. What do you want to expect from the current traffic light government?