Unfortunately, the huge debt-financed spending on fighting the pandemic and on climate protection is not helping to raise political awareness of the increasing deficits in the old-age security system.
A policy striving for sustainability would do well to deal openly with the conflicting goals that the scope for so-called investments in the future is shrinking to the extent that the financial requirements for statutory pensions are growing with the aging of society.
In principle, this conflict of goals associated with the retirement of the baby boomer generation exists on a macroeconomic scale just as it does for the state alone: if rising pension expenditure is financed by higher contribution rates for companies and employees, the first thing to do is reduce the scope for private investment.
If the increase in the contribution rate is dampened by higher government subsidies to the pension insurance system, the scope for public coffers shrinks.
Not without irony in view of today's world of thought
There are two ways out - of which the traffic light coalition has ruled out the direct one: it would be to slow down the demographically induced increase in spending.
This could be done, for example, through a regulation that states that pension increases should continue to secure the purchasing power of pensioners, but may lag behind the increase in wages.
This has been the case since the red-green pension reform of 2001.
The traffic light even puts an end to this with its promise of a new "minimum pension level", increases the financial requirement and also rules out further increases in the age limit.
There is only one way to indirectly mitigate conflicting goals between the future and demographics: through capital cover.
Inspired by an FDP concept called "Aktienrente", it found its way into the coalition agreement;
which is not free of irony in view of today's world of thought of red-green social policy: capital cover (critics say stock speculation) became a political magic formula to dispel doubts about the solidity of the pension promises made by the SPD and the Greens from the election campaign.
Whether there will be more later remains to be seen
In essence, this way has two advantages over the pay-as-you-go system, which does not save the contributions of the employed but transfers them directly to the pensioners: Capital investment can make the economic success of strongly prosperous world regions or sectors usable for pension financing. In addition, a capital stock that secures the claims of a collective helps to spread financing burdens over time and to ensure even payments in the event of fluctuating income. Of course, the state can also do this as a subsidy provider for the pension fund - as long as it does not reach the limits of its ability to borrow.
And what does the “magic formula” of the coalition achieve?
It is only firmly agreed that the pension fund – in addition to grants of more than 100 billion euros annually – will receive a further 10 billion euros this year to build up a capital stock.
Whether there will be more later remains to be seen.
But therein lies an ugly problem: it would require capital of several hundred billion euros.
Otherwise, even dream returns will not be enough to significantly dampen the predicted increase in contribution rates and tax subsidies.
It would be premature to conclude that the plan is therefore futile.
Of course, every euro saved for future expenses that is not spent today does at least some small part in lightening the burden on future payers.
If equities deliver more returns than government bonds, this applies even if the state builds up the capital stock with new debt.
The search for the magic formula
The question remains as to why additional capital cover should be linked to the redistribution pension of all things.
So far, the state-sponsored expansion of private supplementary provision has been used as a lever to bring more capital cover into the system.
But this did not work properly at a crucial point - low earners, for whom the additional module would be particularly important, were too often left out.
Theoretically, this would be best changed by private compulsory provision, which, however, requires good subsidy funding so that everyone can get involved.
Politically, the situation is different: it is difficult to enforce an obligation against the concentrated resistance of trade unions, social organizations and other critics of capitalism.
This makes it easier to build a piece of capital cover into the statutory pension.
It would be a mistake to discard the funded recipe.
But it's not a magic formula.
If you want more investment in future prosperity, you need to curb the rise in pension spending.