“If you’re under 50 and counting on the state, you’re planning your own poverty.”
- Adaptation-Guide
Germany’s Social State is on Life Support: The Era of Reform Isn’t Coming—It’s Here, and It’s Brutal
Autumn has arrived, and with it, a declaration from Germany’s Chancellor: This will be the season of reforms. At the heart of those reforms? The social welfare state. Why? Because, as Chancellor Friedrich Merz bluntly put it:
“With what we produce economically, it is no longer affordable.”
And he’s right. The numbers are a financial horror show—and no amount of political sweet talk will cover the stench.
19.5 Trillion Euros in Debt – But We Pretend It’s 2.7 Trillion
A new study by the Stiftung Marktwirtschaft, presented by Freiburg economist Bernd Raffelhüschen, lays bare the ugly truth. He updates what he calls the Generationenbilanz—a generational balance sheet that tallies every single euro of Germany’s liabilities, including the ones politicians love to hide.
Visible debt? Sure, we all know about the €2.7 trillion in official state debt. But that’s just the tip of the iceberg. When you include the hidden promises—like pensions owed to today’s workers—the real figure is 19.5 trillion euros. That’s 454% of Germany’s GDP.
Let that sink in: almost half a quadrillion percent.
The overwhelming bulk—€16.8 trillion—are implicit debts, promises that haven’t come due yet but absolutely will. And the government has the nerve to act like everything’s fine. Raffelhüschen calls this lack of transparency the worst in Germany’s history. He’s not wrong.
What’s Driving This Debt Bomb?
Two things you can’t legislate away: demographics and time.
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People are living longer.
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Fewer young people are paying in.
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The economy is stagnant.
This isn’t some short-term glitch. It’s a structural collapse decades in the making, fueled by political cowardice and vote-buying policies like expanding the Mütterrente (mother’s pension) and stabilizing pension levels compared to wages. These moves sound good on campaign posters but are economic suicide notes written in bold ink.
Future Generations Are Screwed – Here’s Why
If nothing changes, the government will have to either:
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Cut spending by 14.2% across the board, or
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Raise taxes by 16.8%
...just to close the sustainability gap.
And this doesn’t even count the half-trillion-euro infrastructure package or the defense budget spike. Add those in and the abyss gets deeper:
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The infrastructure program alone adds 9.9% of GDP to the debt gap.
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The pension giveaway adds another 17.7% of GDP.
Meanwhile, Berlin’s answer? Throw more cash at retirees while younger workers flee the system like passengers leaping off a sinking ship.
The Coming Social Insurance Apocalypse
In the 1950s, four workers supported one retiree. Today? Just over two workers per retiree. By 2037, combined contribution rates to social insurance will hit 45.2%. By 2057? Over 49%.
Half your paycheck—gone—to fund a system that is mathematically doomed.
Unless, of course, we act now. But here’s the kicker: the realistic reforms everyone knows are needed? Politically radioactive.
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Raise the retirement age to 70.
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Reinstate the sustainability factor to limit pension increases.
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Kill subsidies for early retirement.
Start these today and you’ve got a fighting chance. Wait until the 2030s—when the baby boomers are already sipping Riesling on the taxpayers’ dime—and it’s game over.
What Happens If We Don’t?
If reforms don’t come, Raffelhüschen warns of “social benefits decided by the size of the coffers.” Translation: pensions slashed, healthcare rationed, and a welfare state that exists in name only.
That cozy German social safety net? It becomes a spiderweb—sticky but fragile, breaking under the weight of every new promise politicians make to cling to power.
The Hard Truth: We’re Not Mitigating Anymore. This Is Survival Mode.
Let’s stop the polite fiction: There is no magical reform that makes everyone happy. The math is merciless. The old model is dead, and no politician will admit it because admitting it is political suicide.
This is no longer a debate about comfort. It’s about survival.
You, me, and every working-age German need to understand this:
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Your contributions will skyrocket.
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Your benefits will shrink.
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Your retirement age will rise.
That’s not fearmongering. That’s arithmetic.
What To Do – When the System Is Broken
If you’re under 50, trusting the state is financial malpractice. Here’s your real playbook:
✅ Start building private reserves NOW. Forget the fantasy that “the government will take care of you.” That ship sank while you were reading this sentence.
✅ Diversify income streams. A single salary tied to a crumbling system? That’s not security—that’s a death sentence.
✅ Consider geo-arbitrage. If the German tax burden hits 50%, working abroad or remote work for international companies isn’t a luxury. It’s survival.
✅ Invest in skills, not just savings. Inflation eats euros, but skills compound. In a contracting welfare state, mobility is power.
✅ Join the political fight—if only to slow the bleeding. Because make no mistake: those who stay silent now will be paying, literally, for the silence later.
Welcome to the Post-Welfare Age
Germany’s famed social state—the pride of the post-war miracle—is no longer sustainable.
This isn’t about ideology. It’s about physics. You can’t promise what you can’t pay for, and Germany has promised itself into a fiscal black hole.
The so-called Autumn of Reforms?
It’s not a season. It’s the start of a survival era. And whether you’re ready or not, it’s here.
Mitigation is over. Adaptation is mandatory.
yours truly,
Adaptation-Guide
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