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1. Germany has an old population. Germany recently added a system of subsidized retirement savings. German savings are traditionally biased towards bonds, not shares.

And you wonder why Germany would have a problem with inflation or long term zero interest rates?

2. German wages are not on average low, just growth has slowed. Germany has just decided that wages need to be less equal than in the 70ies.

by oliver on Tue May 7th, 2013 at 05:34:16 AM EST
[ Parent ]
German savings are traditionally biased towards bonds, not shares.

So I think that is a proof that private pension systems are not a rational solution.

Germany has just decided that wages need to be less equal than in the 70ies.

Of course Germany has decided... or rather those who do not depend of salaries or have the highest salaries...

res humą m'és alič

by Antoni Jaume on Tue May 7th, 2013 at 03:48:38 PM EST
[ Parent ]
  1. The little rentier may be less morally odious than the big rentier, but economically he is only proportionately less damaging. Economics is not a morality play, and by privatizing the pension system, Germany has made the objectively wrong decision.

  2. That decision is incompatible with continued industrial civilization.

- Jake

Friends come and go. Enemies accumulate.
by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue May 7th, 2013 at 06:13:10 PM EST
[ Parent ]
This is not a question of morality. A government that ruins too many pension plans would be removed from power. That is a question of political power, not morality.

Industrial civilization in Germany is well. The decision may be incompatible with a common currency in the EU, but that is a different thing.

by oliver on Wed May 8th, 2013 at 08:15:10 AM EST
[ Parent ]
A government that ruins too many pension plans would be removed from power.

If only there is an alternative. And the "alternative" will not perform the same during its pendelum cycle.

by das monde on Wed May 8th, 2013 at 08:43:36 AM EST
[ Parent ]
Destroying private pension plans is not impossible if the pension plans in question are replaced by sufficiently good public pensions. Just as destroying the public pension plans was not impossible because they were replaced by (the mirage of) sufficiently good private pension plans.

Lack of a common currency is incompatible with the current German industrial system, because lack of a common currency means that Germany cannot get anybody else to pay the cost of maintaining Germany's dead-end economic policies.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed May 8th, 2013 at 01:56:03 PM EST
[ Parent ]
One word: Bürgerversicherung. Don't act as if the idea is alien to German politics.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Wed May 8th, 2013 at 05:45:16 PM EST
[ Parent ]

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