The biggest sponsors of the German state are the working population and pensioners E-Book

Helmut Harter

• Herausgeber: novum publishing
• Kategorie: Gesellschafts- und Liebesromane
• Sprache: Englisch

Seitenzahl: 430

Veröffentlichungsjahr: 2024

Beschreibung

Enjoying time after a busy life with a good pension - that's the dream of us all. And we deserve it after all the hard work. However, for many people, their pension is no longer enough. There are reasons for this, as author Helmut Harter shows us in his book "The biggest sponsors of the German state are the working population and pensioners", and these are mainly due to political decisions: On the one hand, politicians are always happy to reach into the pension fund to finance extraneous benefits with the contributions of the compulsorily insured, such as German unification. On the other hand, not all working people are compulsorily insured, but only the middle and lower incomes. A plea for a solidary and transparent pension system!

Leseprobe

Chapter 1

History

1889: This is how it all began.

The 1889 law on invalidity and old-age insurance marked the start of statutory pension insurance in Germany. Statutory health insurance had already been established six years earlier and accident insurance five years before that.

It was a modest social network that Chancellor Otto von Bismarck had woven - but it was exemplary in Europe.

And it was more than overdue, as industrialization plunged the working population into misery in the 19th century.

Bismarck recognized the danger. With these first three social laws, he attempted to bind the working class more closely to the state and prevent its radicalization.

German pension insurance emerged from the German labor movement.

The social and political conflicts that arose with the first great wave of industrialization in the last two decades of the 19th century.

The attempt of the imperial authoritarian state under Chancellor Bismarck,

The attempt to combat the socialist labor movement with a combination of political repression (oppression, arbitrariness) and socio-political concessions led to a specific institutional solution, the consequences of which continue to have an impact to this day.

The special feature was that the new pension scheme was not designed for one generation, but was only a special workers' insurance scheme.

Workers' insurance did not serve to combat poverty, but to politically immobilize organized labour.

Civil servants have therefore retained their own pension scheme to this day.

Retirement at 70

All workers aged 16 and over were covered by pension insurance, as were "small employees" with an annual salary of up to 2,000 marks. The contribution rate for the new pension insurance was around two percent, with employers and employees paying equal contributions, as they do today. There was also a state subsidy back then. It amounted to 50 marks per year.

Insured persons over 70 with at least 30 years of contributions could receive an old-age pension. A worker with an annual salary of between 550 and 850 marks received 162 marks a year from the new pension fund. If he became incapacitated for work, an annual amount of 60 marks was added. Anyone at risk of invalidity could receive rehabilitation. Rehabilitation was one of the pension insurance benefits right from the start.

State insurance companies

In the course of 1890, 31 insurance institutions were founded in the German federal states, which were later called Landesversicherungsanstalten (LVAen). Thirteen alone were established in the Kingdom of Prussia, the largest and most important federal state in the German Empire.

They collected the contributions, paid the pensions and provided medical treatment in their area of responsibility.

With around 60,000 policyholders in 1895, Versicherungsanstalt Oldenburg was the smallest and Versicherungsanstalt Schlesien the largest with over one million policyholders.

The first pensioners

In 1891, the insurance companies were already paying out around 126,400 old-age pensions.

However, no one had yet paid contributions for these first pensions. A transitional provision made this possible: anyone who was over 70 and had worked for at least three years immediately before the Pension Act came into force could draw a pension.

Full tills

This is how pension insurance was financed in its first decades: Its contributions were calculated in such a way that they covered all expenses for ten years and there was still money left over for reserves. As a result, the state insurance institutions had considerable assets before the First World War.

For the benefit of the poor

The LVA invested the money in social housing and healthcare according to the wishes of their self-governing bodies. This is why workers' housing estates were built all over the German Reich with the support of the pension insurance. They brought workers out of the slums of the suburbs.

It's worth reading this section twice, what do you notice? The surplus money was invested in social housing and healthcare. This measure also made it possible to contain or defeat the rampant tuberculosis.

The importance of social housing for citizens was already recognized a hundred years ago.

This realization was retained after the Second World War during the reconstruction of the Federal Republic.

1911: Reich Insurance Ordinance

In 1911, the Reichstag in Berlin passed the Reich Insurance Ordinance (RVO), which came into force one year later. For the first time, the RVO brought together the regulations of workers' health insurance, accident insurance law and disability and workers' insurance law. It remained the core of German social law until 1992.

The Reich Insurance Code extended the group of people subject to compulsory insurance: from now on, surviving dependants were entitled to a pension from the workers' pension insurance scheme.

1913: Pension insurance for employees

The Insurance Act for Salaried Employees came into force in 1913. Since then, the new Reich Insurance Institution for Salaried Employees in Berlin (a German public corporation) was responsible for them. This central Reich insurance institution was also self-governing.

Salaried employees could draw an old-age pension from the age of 65 and were entitled to a disability pension earlier than blue-collar workers. Surviving dependants were also better protected.

The distinction between blue-collar and white-collar workers was thus made.

It is hard to believe that this distinction (injustice) was only abolished with the organizational reform of the German pension insurance system in 2005.

A two-tier society was cemented.

1914: Empty coffers

The period of full coffers ended with the outbreak of the First World War in 1914. The German economy was converted to war production. Waves of redundancies and rising unemployment meant dwindling contributions for the insurance providers. During the war years 1914-1918, the number of survivors' pensions rose sharply, as the war left many widows and orphans behind.

There was an improvement for workers: they could now draw an old-age pension from the age of 65.

In connection with the use of paid-in contributions by the legislator, the following facts must be pointed out.

Before both world wars, compulsorily insured employees saved considerable amounts of money in the capital cover system that existed at the time. These assets were converted by the legislator into bonds for the state, issued and never repaid. The first expropriation had taken place.

In 1917, pension insurance reserves reached a historic high of around 10 years' expenditure, almost all of which was invested in war bonds.

A similar high was reached in 1939 with around seven annual issues.

Here, too, the insured persons' assets were considerable and were misappropriated for the armaments industry. No repayment was ever made to the policyholders.

1914-1923: Inflation and hyperinflation in Germany

During the months of hyperinflation in 1923, the value of the German currency fell so quickly that wages were paid out daily in many places. People picked up the bills with bags and travel bags and rushed into the stores to get rid of the money, which was rapidly losing value almost every day, in exchange for goods. The traders raised their prices every day.

Many of them only traded goods and services for food and coal or closed their businesses completely.

Social tensions arose.

The inflationary policy began with the outbreak of war in 1914: Reich banknotes were no longer redeemed in gold; the banknotes could now also be covered by government debt securities instead of gold. Instead of financing the costs of the war through higher taxes, the state borrowed from the population and increasingly from the Reichsbank, which in turn put more and more banknotes into circulation.

At the end of the war in 1918, the German government faced enormous financial problems: In addition to the war debts at home in the form of the war bonds issued, there was also very high social spending to stabilize the politically, socially and economically shattered German Reich. In addition, the victorious powers demanded high reparations. The government took out more and more loans from the Reichsbank, which put more and more money into circulation without the supply of goods in Germany increasing to the same extent. The result was a massive rise in prices.

When runaway inflation turned into hyperinflation in 1923, money lost its function as a general means of payment and store of value. The government initiated a currency reform.

In November 1923, the mark was replaced by the Rentenmark. Inflation almost completely devalued all debts and financial assets that had been denominated in marks. The state profited the most: the total war debt of 154 billion marks amounted to just 15.4 pfennigs on the day the Rentenmark was introduced.

The First World War cost pension insurers considerable assets. Pension insurance also survived the inflation that followed the war.

The inflation of 1918-1923 destroyed 90 percent of the accumulated pension insurance capital.

The introduction of the Rentenmark, which was later supplemented by the "Reichsmark", put an end to inflation in 1923. Pension insurance was able to start rebuilding its benefit system again.

Even an intergenerational contract would not have survived the First World War and the subsequent inflation. The warmongers, the Kaiser and his vassals in the First World War and Hitler and his brown NSDAP officials in the Second World War, would have led any statutory pension scheme to ruin.

1923: The "Reichsknappschaft"

In 1923, the Reichstag passed the Reich Miners' Insurance Act. It brought together the previously fragmented insurance companies of the miners' associations under the umbrella of the self-governing Reichsknappschaft.

1927: Protection for the unemployed

A significant achievement of the Weimar Republic was the introduction of unemployment insurance in 1927, when the Reichsanstalt für Arbeitsvermittlung und Arbeitslosenversicherung was founded to provide unemployment insurance.

1933: The Third Reich

On January 30, 1933, Adolf Hitler and the National Socialists took power in Germany. This marked the beginning of the persecution of opponents of the regime and the Jewish population. The National Socialists quickly permeated all areas of life with their ideology. Throughout the civil service, employees who did not fit into the Nazi world view for political, ideological or racial reasons were dismissed.

The new rulers abolished self-administration as early as May 1933. A "leader" loyal to the regime took over the management of the pension insurance institutions.

The pension insurers had to invest large parts of their assets in Reich bonds. Hitler used these to finance his war preparations, among other things.

The German state never repaid these Reich bonds of the working population either.

The National Socialist ideology was also systematically implemented in the pension insurance system. Step by step, the Jewish population and other persecuted groups of people were robbed of their entitlement to benefits and their property. Hidden inflation in Germany from 1936-48 was used to finance the war effort through government debt to the central bank and the associated expansion of payments and money supply. Price freezes, wage fixing, rationing and ration coupons prevented inflation from becoming visible. Nevertheless, the massive devaluation of money led to a currency reform in 1948, in which the D-Mark was introduced and exchanged for Reichsmarks at a ratio of 1 to 10. Savers and owners of financial assets found themselves largely dispossessed.

The working population and pensioners in the statutory pension insurance scheme had to help finance another world war within 35 years with seven annual contributions.

The considerable debt of 17 annual contributions was never addressed by the new Federal Republic.

1945: The zero hour

May 08, 1945 - the Second World War was over in Germany. The country lay in ruins. The pension insurance institutions were also in chaos, as the war had destroyed many files.

Despite the critical financial situation, it was possible to pay pensions via the post offices from mid-1945.

The Allies divided Germany among themselves. In the east, in the Soviet-occupied zone, the Russians introduced a uniform insurance system and established the Reichsversicherungsanstalt für Angestellte in 1945. They transferred their tasks to the state insurance institutions, which had resumed their work in the West.

1948: Currency reform

With the currency reform of 1948, the Reichsmark became the Deutsche Mark in three western zones. The reform led to an economic recovery, particularly in the West, as well as rising wages and growing pension insurance contribution income.

However, pensions lagged behind wages, with the result that old-age poverty was widespread among pensioners in the early post-war years. The state subsidy was massively increased after the war in order to secure the level of pensions.

And once again, the pension insurance institutions had lost the money saved by the insured.

No pension system, however good, would have survived these two world wars and the subsequent currency reforms.

Germany was divided in1949.The Federal Republic of Germany was formed in the west and the German Democratic Republic (GDR) in the east.

The social insurance systems in the two German states also diverged. While the West retained the traditional system of social insurance based on insurance branches, the Soviets introduced a unified insurance system in the East. From 1956, the Free German Trade Union Federation (FDGB) was responsible for the entire political, organizational and financial management of social insurance for workers and employees in the GDR. Supplementary systems were open to selected groups of people.

1950: Start of systematic housing construction

In West Germany after the Second World War:

The destruction of infrastructure and housing due to the air raids during the Second World War left nine million people homeless and forced to relocate to rural areas. In addition, there were 12 million displaced persons from the former German eastern territories in Poland, the Czech Republic and the Soviet Union. This meant that 21 million people were looking for a new home. According to the occupying powers, Great Britain, France and the USA, 13.7 million households needed a home. However, only 8.2 million housing units were available. The difference was 5.5 million missing apartments.

The Allies decided on a housing construction program in 1946, which the Federal Government joined in 1949 after the founding of the Federal Republic of Germany. A housing law was then introduced by the federal government in 1950. This provided for the social promotion of 3.3 million apartments over the next 10 years. In addition, another 2.7 million apartments were built by private individuals. The "compulsory housing management" passed in 1949 should also be seen in this context. This stipulated that existing apartments could not be terminated, rents could not exceed a state-determined rent level and private individuals, if they had available housing, had to rent it out to people looking for accommodation. Thanks to these measures, the greatest housing shortage was resolved by the end of the 1950s. Why subsequent governments no longer considered the construction of social housing to be so important remains a mystery.

Apparently, there were studies and consultants who were of the opinion that the existing stock of social housing was getting on in years and needed to be sold off as cost units. Existing stocks were dismantled and sold on to real estate groups.

In the 1960s, the government was still investing in 200,000 social housing units per year, and in the 1970s it was still investing in 100,000 social housing units per year.

Since reunification, existing social housing has been reduced through sales.

In the 1950s and 1960s, at least 30 percent social and affordable housing was seen as a prerequisite for a socially balanced housing policy.

At the end of the 20th century, the number of apartments in social housing decreased drastically. While there were still 3.9 million social housing units in Germany in 1987, the population and building census recorded only 1.8 million units at the end of 2001.

The political elite and their advisors have reduced social housing construction to 3.5 percent and around 1.3 million socially subsidized apartments.

With over 40 million households, politicians have massively violated their duty of care to provide sufficient affordable housing.

The consequences are: The German state pays billions of euros in housing benefit due to a lack of social housing.

The abolition of the non-profit status in particular meant that social housing was no longer bound by the non-profit housing law and was therefore available for privatization and the free market.

This has led to a drastic reduction in social housing since 2000.

1951: The New Self-Government Act

The "Self-Administration Act" of 1951 was one of the first post-war social policy laws in the Federal Republic of Germany. It laid the foundation for the nationwide reintroduction of self-administration in all branches of social insurance.

The law essentially restored the legal status quo from before 1933. The "head" from the Nazi era was abolished. The self-governing body of the pension insurance scheme became the Assembly of Representatives instead of the former Committee and the Board. Both bodies were made up of equal numbers of voluntary representatives of insured persons and employers. The members of the Assembly of Representatives elected the Executive Board. The former civil servant members of the Board of Directors no longer existed, but an elected full-time management board did.

The first social insurance elections were held in 1953.

1952: Equalization of Burdens Act

The aim of the Equalization of Burdens Act (LAG) of August 14, 1952 was to grant financial compensation to "Germans" who had suffered financial losses or special disadvantages as a result of the Second World War and its aftermath.

This is stated in the preamble:

"Recognizing the right of the parts of the population particularly affected by the war and its consequences to a compensation of burdens taking into account the principles of social justice and the economic possibilities and to the assistance necessary for the integration of the injured parties and with the express reservation that the granting of benefits does not constitute a waiver of the assertion of claims for the restitution of the property left behind by the displaced persons."

Was that solidarity in action? I think so, considering that in the years 1945-1950 around 15 million displaced persons, whose belongings fit into a suitcase, came to the Federal Republic.

In December 1948, the western zone had to make a state pension adjustment with emergency aid. The financial losses caused by the war and its consequences were enormous in the young Federal Republic.

The model for the Equalization of Burdens Act was the legislation on the equalization of burdens in Finland after the expulsion of the Finns from Karelia.

The charges for the equalization of burdens:

This redistribution was carried out by those who were left with considerable assets paying a burden equalization levy. The amount of this levy was calculated according to the amount of assets as of June 21, 1948, the day the D-Mark was introduced in three western occupation zones.

The levy amounted to 50 percent of the calculated assets and could be paid into the equalization fund in 120 quarterly instalments, i.e. spread over 30 years. A property levy, a mortgage profit levy and a credit profit levy were introduced for this purpose. The charge was only 1.67% per year, spread over the years, so that the capitalized earnings value of the assets concerned could be paid without having to attack the asset substance.

After the creation of the Federal Republic, but before the formation of the first federal government, a substance tax of three percent was levied on existing property as immediate aid.

Today, the political elites, economists and the media allow themselves to insinuate that these generations of war pensioners took and are taking away sufficient pensions from future generations. This is not just polemic, it is slander and disrespect for this generation of workers.

I would be happy to repeat myself several times in this regard at one point or another.

This generation of pensioners, as they like to be called, had their pension contributions and earnings taken away from them to finance two world wars. The German state has been in their debt for 70 years.

They lost 90 percent of their savings in the banks twice as a result of two inflationary cycles. By foregoing many of the comforts that are standard today, the citizens helped to build Germany (the Federal Republic) into a leading economic power in Europe in a relatively short time.

1953: Foundation of the BfA for salaried employees

It was not until the Federal Insurance Institution (BfA) was founded in 1953 that employee insurance was given its own institution again.

In the 1950s, a fundamental change in German social policy became necessary. The economy was visibly on the up. Its steady growth brought modest prosperity to large sections of the population. Nevertheless, there was still poverty and need on an alarming scale as an after-effect of the Second World War. The young Federal Republic was confronted with a large influx of refugees and immigrants. Unemployment could only be reduced gradually. In 1953, there were still 1.5 million unemployed. The war dead had left behind widows and orphans and were no longer contributing to the social security system. Statutory pensions (pocket money) had to be maintained by state subsidies.

In this situation, pension reform meant complete renewal.

On the advice of W. Schreiber ("W. Schreiber was a German economic theorist and is regarded as the father of the dynamic pension"), a significant step was taken in German pension policy. This was followed by a departure from the existing funded pension scheme.

The justifications for abandoning the existing funded pension schemes were poor and lacked any logic.

Let's assume that the pay-as-you-go old-age pension (the intergenerational contract) had already existed. The contributions of the working population to the pension scheme (whatever it would have looked like) would have been used in the same way for the war machine.

The fact that civil servants and the upper classes did not pay into their own pension schemes speaks against pay-as-you-go pensions.

The Federal Republic of Germany had a different problem.

It had to make immense reparation payments, in addition to the financial "provision for the war pensioners, widows and orphans of the five million fallen soldiers". Existing savings were 90 percent wiped out by two inflationary periods. Due to empty coffers, the Federal Republic was unable and unwilling to compensate.

With the pay-as-you-go pension scheme, money did not go into the next generation's old-age provision, but rather plenty of liquid funds into the empty coffers of the Federal Republic.

Thus, the pay-as-you-go pension system was born (the intergenerational contract). The legal basis for financing was Section 153 SGB VI (the so-called pay-as-you-go system), which means that the German pension insurance covers its expenditure in a calendar year with the income of the calendar year in question. In addition, it can also access the sustainability reserve (the accumulated contribution reserves). A great thing at first glance!

Let's take a closer look at the pay-as-you-go system: the first generation of pension recipients (war pensioners, widows and orphans) receive a benefit without having made large contributions themselves. This has been the reasoning of the German state for 66 years.

The truth is, the war pensioner generation had made large contributions, only the contributions were used for war purposes.

The German state had expropriated the contributors. It never fulfilled its financial and moral debt to the post-war pensioner generation.

In this new Federal Republic, which was still staffed with many Nazi officials, the deliberately wrong attitude and handling of the pay-as-you-go system opened the door for subsequent governments to use the property of the contributors to the statutory social insurance schemes as they saw fit.

In 1957, 14.5 billion gold marks were plundered from the pension fund by the new Federal Republic. It was understandable that the new Federal Republic needed all its money reserves to rebuild the country and meet its war debt obligations. The contributions taken from the pension fund could and should have been secured with a federal bond or something similar.

Since 1957, employees and employers have paid contributions to the new statutory social insurance schemes for 30, 40 or 50 years, and the coffers have miraculously filled and emptied.

No income was ever generated; the fact that the revenue was immediately used by the German state for reconstruction, which was actually understandable, was never honestly communicated to the citizens. The Federal Republic's accumulated debt to the working population and pensioners was sold to the working population as early as the 1960s with the first brainwashing, the so-called federal subsidy.

The high federal subsidy in 1957 and the pension reform had an alibi function that still works today. But that was not all, the lies were taken to the extreme by using the withdrawn contributions as a populist weapon against the working population and claiming that six contributors had financed one pensioner in the 1960s.

Evil tongues say that this nasty depiction could only have been created in Nazi brains. I dissociate myself formally from this.

Nevertheless, I would like to express my opinion on a funded pension.

The funded pension for employees covered by statutory social insurance, which was maligned by those in power and the upper classes, has been vehemently defended by the aforementioned as the only correct form of investment to this day.

When I hear how much return these state pension schemes have yielded, quite honestly I would also object to having to pay into these supposedly loss-making statutory social insurance schemes.

The question arises as to why, in the case of pay-as-you-go financing, interest is not paid on the balance saved in the account?

Civil servants, the self-employed, freelancers, the entire upper class, had smelled a rat and therefore did not participate in pay-as-you-go financing.

The national economist Schreiber wanted to build up the German pension on a broad basis. In other words, by including the self-employed and freelancers.

The term "solidarity contract" was coined in the Schreiber Plan.

1954: Wilfried Schreiber is regarded as the "father of the dynamic pension".

In 1954, on behalf of the Federation of Catholic Entrepreneurs, he developed a draft for the reform of statutory pension insurance in the Federal Republic of Germany, which was presented to the Bundestag for approval in 1957 in a significantly modified form as the so-called intergenerational contract. The main features of this system were dynamic pay-as-you-go financing and the automatic linking of pension levels to the level of earned income.

Although Germany was devastated after the Second World War and many cities and communities were largely destroyed, 15 million refugees from the former eastern territories were integrated into the new Federal Republic in a humanitarian tour de force.

What were the measures?

Even after the creation of the Federal Republic, but before the formation of the first federal government, an inventory tax of three percent was payable on existing property.

There was also a redistribution in that those who were left with considerable assets paid a 50 percent equalization levy in 120 quarterly instalments into an equalization fund.

With the founding of the BfA in 1953, the social insurance funds were put in a position to help the new Federal Republic with their contributions from the social security funds.

The 1957 pension reform legalized dipping into the pension fund by converting the previous funded pension scheme into an intergenerational contract with a federal guarantee and a fixed federal subsidy.

The federal guarantee was circumvented by expropriation and 80 percent of the pension contributions paid into the new statutory pension insurance scheme were used for reconstruction and reparations.

If the withdrawals from the pension fund had been legally provided as an advance with a repayment guarantee, this would certainly have been understandably accepted.

What prompted the political leadership at the time not to record the sums of the contributions withdrawn, following the same principle as in the First and Second World Wars? Is there deliberately no reliable data on this?

The myth spread by the political elite, their advisors and the media over the last 50 years that in the 1960s six working people financed one pensioner is astonishing and incomprehensible to logical thinking.

This scattered false statement was the first permanent brainwashing that has not only persisted to this day, but has become so entrenched that no one has ever thought that there could be anything wrong with this alibi statement. Nobody wanted to put this statement to the test. The German state has taken many billions of contributions from the GRV. The German state has never disclosed the exact amount of contributions taken from the GRV.

The suspicion is that repayment to the statutory pension insurance was not intended.

We note: In 40 years, World War I, World War II. Three expropriations of the contribution reserves saved by the working population.

So several hundred billion Deutschmarks in old-age pensions were quietly and secretly used by three generations for the wars, reconstruction, social housing, reparations and for the accommodation of NSDAP officials?

Despite these painful cuts, or perhaps precisely because of them, the new Federal Republic managed to tackle the most urgent task of providing people with the bare necessities after the end of the Second World War ("More than half of the housing, roads and bridges were destroyed"). Within 10 years, the housing shortage was significantly reduced through the construction of social housing. The economy grew rapidly and within a few years the German economic miracle was born.

The economic miracle was only possible with the unconditional will and solidarity of the citizens, supported by the Marshall Plan, the introduction of the social market economy and recourse to the sustainability reserve (the reserves of the contributors to the statutory pension scheme).

Everyone realized that we could only do it together. Only the civil servants were left out. This was not surprising, as many of those at the levers of power were men who had previously served Hitler loyally. Mention must be made of Hans Globke, who had worked as a lawyer during the Nazi era and at the height of his career was allowed to serve as head of the Federal Chancellery under Konrad Adenauer from 1953 to 1963. Hans Globke was one of 107 senior civil servants in the Federal Chancellery between 1950 and 1960, all male, 70 percent of whom were lawyers, most of whom had supported the Nazi regime.

More than 30 years had passed in which the German state had successively enriched itself from the property of working people through withdrawals and pension cuts.

The BVerfG and the BSG are also losing more and more credibility with their rulings on pension law. All judgments must be called into question due to the bias of the judiciary ("all are civil servants").

More and more citizens are realizing that "valid law" has increasingly mutated into lobbyist law and has little to do with "justice".

The judiciary, as the controlling body of the separation of powers, failed miserably. It seamlessly followed the legislature's two-tier legislative system with a two-tier judicial system.

It's amazing that the Bonn Republic still allowed so much brown sentiment.

Chancellor Kohl envisioned the reintegration of the eastern federal states in 1990 to be financially manageable, relatively quick and easy.

Now, 33 years later, this miscalculation is still costing the German state a lot of money.

How was reunification achieved? Were the successful measures taken after the Second World War also applied to reunification? No: Why not?

The forecasts and studies on the likely costs of reunification were totally underestimated. The successful measures enacted by law in the Federal Republic at the beginning of the 1950s were not dared to be applied again. The summer of great promises followed in 1990.

In a televised speech on economic and monetary union on July 1, 1990, the then Chancellor Helmut Kohl promised that the five new federal states would soon be transformed into flourishing landscapes worth living and working in.

He had already said in May that the whole thing would not be a direct burden on the West Germans:

"We see no reason to increase taxes to finance German unity," he said in the Bundestag.

Today we know that this promise proved to be untenable.

By the end of 2010, the restructuring of the ailing economy and the inclusion of East German citizens in Germany's social systems had cost at least 2.1 trillion euros. In the meantime, the costs have risen to over three trillion euros.

The costs of reunification were covered by:

Pay-as-you-go transfer from statutory social insurance "The biggest single chunk",

about tax increases,

about pension cuts,

New debt of the federal government, federal states and municipalities,

Allocations from the European Union and

financed via the solidarity contribution.

The largest share of the costs of German unification was financed by transfer payments from the German social security system.

The German state had no scruples about reaching into the statutory social security funds and using the property of working people and pensioners to finance reunification.

Expropriation is nothing new; it has been carried out as required for 66 years.

There has never been any question of repayment or compensation for the contributions withdrawn.

Why are the transfer payments for reunification financed via the statutory social insurance schemes?

This is easy to answer: since 1957, civil servants and the upper classes have not contributed to the costs of public welfare.

The financing of German unity was not financed by a burden-sharing law, as was the case with the post-war refugee flows. Obviously, the upper classes and civil servants were to be spared. The political elite and their advisors had a much better idea.

The financing of the unit should and was also handled (financed) by social transfers via the statutory social insurance schemes.

The contributions saved by business, the wealthy, the upper classes and civil servants were to provide an incentive to invest in the upturn in the East.

In many cases, the investments were a complete failure and hundreds of billions of euros were wasted.

The share of the upper class and civil servants was simply shifted to the statutory social insurance schemes for working people and pensioners.

What do you notice?

In the first years after the Second World War, all sections of the population had to contribute to the reconstruction of the Federal Republic. This was the only way to get 15 million refugees into accommodation and work in a short space of time. Everyone pulled together.

At reunification in 1991, the wealthy, the business community, the upper classes and civil servants were not required to make any further solidarity contributions apart from the solidarity surcharge. Why not?

When the Federal Republic was created, a substance tax of three percent was payable on existing property as immediate aid.

On August 14, 1952, the Equalization of Burdens Act was passed and 50 percent of the existing assets were distributed over 30 years.

These measures were painful, but in the end everyone benefited from them.

To the chagrin of those subject to social insurance contributions, 70 billion euros in reserves built up by the statutory pension scheme were illegally withdrawn for transfer payments to the new federal states. It was also decided, but not made public, that this time the equalization of burdens would be settled via the statutory social insurance schemes.

This was relatively simple, the pension rate was simply lowered.

Despite these obvious injustices and discriminatory treatment, the judiciary fails completely in terms of the separation of powers and does not correct the excesses of the legislature (legislation). The judiciary was biased because they are also civil servants.

Those subject to social security contributions were required to deduct from their paid-in contributions

(ownership) will finance the sum of 460 billion euros (rounded up) in integration costs for East German citizens from the statutory pension scheme and statutory health insurance by 2021.

Why didn't the German government secure this bloodletting with, for example, a federal bond for the social security system with a term of 30 years?

Why wasn't a second equalization law passed by the wealthy, as was done in 1948, with a limited term of 30 years?

The Equalization of Burdens Act of 1948 was a model of success for both sides, benefiting both the state and the wealthy.

In 1991, the government did not dare to demand burden sharing from the wealthy. In the minds of the political elite, burden sharing was a reality. Couldn't they have come up with a better solution? There was still the statutory social insurance for employees and pensioners.

With the pension reform of 1992, the costs were imposed on the statutory social insurance schemes by decree.

Since 1992-2021, transfer payments amounting to 460 billion euros have been withdrawn from the statutory social insurance schemes without compensation.

The question arises, why were the transfer payments of the reunification (costs of social benefits), which affect all citizens in Germany, including the upper class, the self-employed, the rich and civil servants, not financed from tax revenues?

When it comes to social insurance, we have a pure dictatorship of politicians and civil servants who abuse their power to put employees who pay contributions at a significant disadvantage. This does not exist in any other western democratic country.

Where was the judiciary as a supervisory body for the separation of powers?

The judiciary is entrusted to (non-biased) judges and is exercised by the Federal Constitutional Court, the supreme courts of the Federation and the courts of the Länder.

Not only do we have a two-tier social system, we also have a two-tier legal system.

What was that about the federal subsidy? A common statement: The federal subsidy eats up the federal budget.

Another common statement: statutory social insurance is on the verge of collapse.

A civil servant pension expert called for a reduction or suspension of the federal subsidy in 2020, although he too should know that the federal subsidy does not compensate for non-insurance benefits.

As early as 1981, the VDK took legal action against three pension reforms before the Federal Constitutional Court. The case was dismissed. The Federal Constitutional Court ruled that employees and pensioners do not have the same rights to pensions as other citizens, i.e. civil servants, politicians, doctors and lawyers. The pension fund belongs to the "public funds".

It makes your skin crawl! Here, fundamental rights are being violated by judgment - not even in the German Empire. Here, workers and pensioners have been deprived of their basic rights by the highest constitutional court.

Article 1 Protection of human dignity, Article 3 Equality before the law, Article 14 Expropriation, Article 15 Socialization, transfer to common property. The legislator has confirmed the right to a two-class society by law.

It is unacceptable that the statutory social insurance funds alone have to bear the burden of all social tasks.

Only people who are not part of the system have a say in the reforms. Civil servants, lobbyists, trade associations, employers' associations, a dozen economics professors.

This bundled expertise is biased due to dependencies.

This ruling has given the ruling politicians all the freedom and access to the social security funds.

This confirmed the establishment of the federal subsidy in the pension insurance scheme and not only that, it was not only permitted by law, but also stipulated by law that working people and pensioners must pay the first-class citizens' share of contributions for the common good.

It is therefore not surprising that the political elite, the upper classes, the media and business associations are regularly brainwashed into proclaiming that the ever-increasing federal subsidy is jeopardizing the federal budget in Germany.

Those who spout such things to the world should urgently have their IQ checked, these people have more than just a blockage in their heads.

Let's call them by their names. These are the business and employers' associations (BDI, BDA, IW, DIA); the economics professors - there are more than a dozen of them, but I don't want to name them publicly.

This bundled expertise is biased due to dependencies (lobbying). Some people talk about the pension mafia.

As the saying goes: the fish starts to stink at the head. Or the honorarium euros block the social brain hemispheres of pension professors. (" These are polemical, unproven statements") I distance myself from such statements. But it is right if elementary basic rights can be overridden on the grounds that this is a solidarity system that only applies to those in employment and pensioners covered by statutory social insurance. Then this is deliberate discrimination against those subject to compulsory insurance and pensioners.

When it is suggested to the population that the statutory pension scheme is on the verge of collapse if people do not work until they are 70 ...

Then the aforementioned groups in first-class society will only have fears and nightmares that they too will have to make contributions to the solidarity community in the near future.

That is why they want to brainwash working people and pensioners into believing that there has been too little intergenerational fairness to date. And anything that is good for pensioners is inevitably bad for contributors, or worse still, is at the expense of their children.

This is nonsense, but with this perfidious ploy, the groups mentioned are cleverly playing young against old.

The constant reference to the children is intended to awaken protective instincts in all well-meaning people and create a guilty conscience in today's generation of pensioners. Who wants to harm their grandchildren?

The group's statement that there is too little intergenerational fairness is correct, but the reason is quite different, which they understandably do not want to mention. The real reason is that the first-class society has not been involved in the intergenerational contract since 1957. That is why there can never have been intergenerational justice since 1957.

The associations, economists, politicians, self-employed people, managers and lobbyists must ask themselves where they see themselves in this intergenerational justice.

The dangerous thing about a lie is that if it is repeated often enough, it is believed in the end and the lie becomes the truth.

The facts: The German state owes the contributors of the war generations before 1957 at least 100 billion euros.

Chapter 2

The generation contract

1957: The intergenerational contract

In 1957, Adenauer transferred the existing assets from a funded pension scheme to a fictitious "pay-as-you-go intergenerational contract".

The intergenerational contract refers to a "fictitious solidarity contract between two social generations" (Wilfrid Schreiber) as the theoretical and institutional basis for a dynamic pension financed by the pay-as-you-go system.

The aim is to introduce attribution rules for the distribution of earned income with the intention of dividing individual consumption opportunities appropriately between the three phases of life: childhood and youth, employment and old age.

The term intergenerational contract is not to be understood legally, but figuratively, as no legally enforceable contract can be concluded between the generations.

"The term "intergenerational contract" has acquired great significance in German social history. Depending on how it is understood, different socio-political conclusions are drawn.

Different definitions:

Definition from the large Bertelsmann encyclopedia (1990):

In Germany, the idea of a "solidarity contract between the generations" was developed by W. Schreiber. The starting point is the observation that earned income from gainful employment is to be understood as lifetime income. It is based on the phases of life: Childhood and adolescence, a phase in which the skills for gainful employment are acquired, + working age, during which income is earned. But it must also be sufficient for the retirement phase.

If society is seen as a community of solidarity, it can and must find solutions for the distribution of the income earned by the middle generation in order to secure social peace between the generations and ensure their livelihood as well as that of their children and the elderly. This task falls to the respective social security system.

On the other hand, there is a narrower definition that can be found, for example, at the Federal Ministry of Finance and the German Pension Insurance:

The generational contract refers to the unspoken "contract" between the generation paying contributions and the generation receiving pensions. The monthly payments made by employees and employers into the state pension fund are intended to finance current pension payments. For their part, the working and therefore paying generation expects that their pension will also be covered by the contributions paid by subsequent generations. In fact, the intergenerational contract as the basis of the German pension system is a state-organized maintenance obligation towards the older members of society.

The difference between the two definitions lies in the fact that the middle working generation is seen as having a duty towards both the young and the old generation.

The other concept of the intergenerational contract is limited to a state-organized maintenance obligation of the middle generation towards the older generation and the young generation appears here only as the object of an expectation that they themselves will later enter into the intergenerational contract.

History

The concept of the intergenerational contract is historically based on the idea of the social contract as it was developed in the 18th and 19th centuries, as well as the interpretation of social insurance based on the model of private insurance.

The concept of the intergenerational contract was then used in particular in connection with the introduction of the pay-as-you-go system in statutory pension insurance and later also in other redistribution mechanisms in the welfare state (particularly in health insurance for pensioners and children and in long-term care insurance). In a broader sense, the intergenerational contract is also referred to in political debates in the areas of education, budgetary policy and generally in connection with sustainability.

I cannot judge which is the correct or better definition.

The political elite's view of the intergenerational contract has been interpreted according to need and discretion and does not do justice to either definition. In general, the time interval of a generation is assessed as 30 years of life.

The original statutory pension insurance system was based on the accumulation of pension contributions, which were to be paid equally by employers and employees into pension accounts. However, apart from brief periods, there was never sufficient capital coverage.

The fact that this and every other system could not function during two world wars and two inflationary periods was not due to the system.

Any intergenerational contract would have collapsed during this time.

The capital cover method (also: capital cover principle) is a calculation and financing method for (private or state) individual insurance schemes and social insurance schemes based on compulsory membership.

Savings portions from the insured persons' contributions are invested on the capital market and a so-called actuarial reserve is formed for each individual insured person, which is intended to cover the benefits to be paid after savings have been made. All current and future claims are serviced from this individual actuarial reserve in the corresponding amount. The coverage ratio provides information on the percentage of obligations covered by assets.

In the projected unit credit method, the required amount of actuarial reserves is calculated according to actuarial principles, i.e. taking into account the probability of death (mortality table) and the expected return on capital on the capital market.

This determines the amount of contributions to be paid. The premiums are used to save the actuarial reserve, which is invested on the capital market. In accordance with the equivalence principle, the actuarial reserve is later gradually paid out in the form of pension payments.

The question of whether pension insurance and long-term care insurance should be converted from a pay-as-you-go system to a funded system is politically controversial. Despite all the arguments for and against the funded or pay-as-you-go system, two crucial points were not discussed (for whatever reason).

The pay-as-you-go system (the intergenerational contract) can only work if all (really all) working people, including civil servants and the upper classes, make their compulsory contributions to the statutory social insurance schemes.

It is unacceptable, as has unfortunately happened, for the German state to misappropriate the property paid in by those with compulsory insurance for more than 60 years and to use the statutory social insurance funds as it sees fit.

I will inform you in detail about these arbitrary withdrawals.

I am still of the opinion that equal savings by employers and employees in pension accounts would have been and still is the better solution. Every working person would have their own account. Manipulation would be impossible.

There would be no demographic change and no ageing population. Everyone receives what they have paid in during their working life.

The decision-makers can provide information as to why they are still clinging to their traditional pension schemes.

The non-insurance benefits could be paid by all working people via a percentage solidarity contribution of, for example, three percent. With an average gross income of 44,000 euros per year for 60 million people, including the working population, the upper class and civil servants, this would amount to around 70-80 billion euros. This would ensure the financing of non-insurance benefits.

The intergenerational contract that Adenauer imposed on the working population was primarily due to his own goals and had many question marks. The civil servant elite and the upper classes were not allowed or did not want to join the intergenerational contract.

"One explanation" could be that more than 70 percent of the old and now the new civil servant elite still held the view of the two-class society of the Kaiserreich and the NAZI regime.

This enabled those in power, the business community, lobbyists and the upper classes to manipulate the contract as they saw fit, as has been done with every pension reform in 60 years.

But there were also other reasons why the intergenerational contract was doomed to fail.

To do this, we need to explain the term generation. The term generation comes from Latin and refers to all people who were born in a certain period of time.

Now I ask the readers? Where do the political and economic elite of Germany find themselves in this intergenerational contract?

It was planned, but not feasible, to integrate the upper classes and civil servants into the intergenerational contract.

Why was the intergenerational contract never put in writing?

The respective governments would not have been able to manipulate the intergenerational contract as a solidarity contract as they saw fit.

The concept of a two-tier society is becoming increasingly entrenched.

Which generation do civil servants, the self-employed and the upper classes belong to? This is an open question that has been 66 years in the making.

As already reported, the biased BVerfG made a decision in 1981 which, in the opinion of lawyers, overruled elementary basic rights on the grounds that it was a solidarity system.

With this decision, the BVerfG is relying on an alleged solidarity system that did not work at all because the upper classes and civil servants never participated in it.

This means that, among other things, the principle of equality does not apply and entitlements that have already been acquired in accordance with the law may be retroactively canceled if the statutory pension insurance scheme is short of money.

This decision was confirmed again on February 27, 2007.

This ruling is a scandal of the first order and, as already mentioned, a violation of the Basic Law. With this ruling, the BVerfG is encouraging the state to legally steal the property of working people.

Example: The pension fund is full, the state helps itself until the money in the pension fund runs out. Now comes the alibi function: the federal subsidy is increased by the withdrawn contributions and the withdrawn contributions are retroactively canceled.

At the same time, the increase in the federal subsidy for pension insurance is blamed in the media. And this has been going on for 66 years.

The federal subsidy has nothing whatsoever to do with the statutory social insurance schemes; the statutory social insurance schemes pay one third of the non-insurance benefits, which should actually be financed 100 percent from taxpayers' money.