Social spending accounts for almost half of the German federal budget. This makes it a juggernaut that is ideal for hiding election gifts and promises during election campaigns. Of course, tax money is also used for vulnerable groups and family policy goals. But most of it is used to plug the funding gaps in the social security system stemming from political promises.

The election gifts are usually realised via social security funds. Although the federal government finances part of the costs through subsidies, the other part is usually borne by the contributors. Without the cross-subsidisation of pension contributions, for example, the rates there would not currently be 18.6%, but would have long since reached 25% of gross wages. And every new promise pushes contributions even higher. A dangerous game! Because further increases in contributions are poison for the economy as a whole. They also increase non-wage labour costs and thus the competitiveness of companies, reduce purchasing power, weaken growth – and ultimately put pressure on tax revenues.

In the current election campaign, new social hardships are again being found that need to be alleviated, instead of addressing the more urgent financing problems of the social security funds. The pension system is on the verge of collapse due to demographic trends: Fewer and fewer contributors have to finance more and more pensioners. By 2035, 21 million people will be over the age of 67, and there are also is likely to be a significant number of early retirements. At the same time, however, the number of contributors will have fallen dramatically, by 5.8 million.

The available levers are clear: More immigration, higher retirement age and/or a falling pension level. To keep the contributors in line, one would even have to think the other way around: Freeze the contribution level and align the benefits with the contribution volume. But the opposite is happening: The SPD, Greens and CDU/CSU want to freeze the pension level at 48% (net standard pension). The AfD and the Left Party are even in favour of an increase. The parties also do not want to shake up the retirement age and, on top of that, are sticking to the full pension after 45 years of insurance.

The CDU/CSU are at least calling for a share-based pension, the Greens for a „citizens“ fund’ to supplement the „statutory“ one, and the FDP for a retirement savings account. And almost all parties want to incentivise people to continue working after retirement. This will alleviate demographic hardship. Some are also thinking about how to recruit migrant labour in order to ease the burden on social security funds. But no one dares to tackle the crucial points. „That would also be too unpopular and extremely damaging to the careers of elected representatives,“ says demographic researcher Bernd Raffelhüschen, referring to the ever-growing group of pensioner voters.

When it comes to other social sectors such as health and long-term care insurance, some campaigners are also primarily concerned with „improvements“, such as more money for carers and less or no more co-payments.

Ultimately, two camps have emerged: The CDU/CSU and FDP want to „educate“ citizens to adopt more economically sound behaviour through cost transparency and personal responsibility (co-payments). At the same time, finances are to be stabilised through private pension supplements – preferably also with capital cover.

In contrast, the other parties do not want a solution, but simply to inject more money into the system. They are calling for civil servants and the self-employed to be included in the statutory health insurance system, and for the insurance threshold to be abolished so that high earners can return to the statutory system. In the case of health insurance, this is called „citizens“ insurance’. In the care sector, a „citizens“ care insurance‘ (SPD) / „citizens“ care insurance’ (Greens) is to be introduced. And the statutory pension will become a „citizens“ pension’ with more contributors.

In fact, more money will initially flow into the „citizens“ health insurance scheme. But on the one hand, this is only a temporary advantage because the contributions also give rise to an entitlement to benefits. On the other hand, there is no competition between „statutory“, „substitute“ and „private“ health insurance funds. A look at the UK's National Health Service (NHS) is rather daunting in this respect. The financial crisis in pensions and care will also be delayed somewhat at best.

This is because the cost-driving structures remain intact. According to a study by the Iges Institute, the contribution rate of all statutory health insurance funds will rise to almost 50% by 2035 without reforms. In addition, the German Economic Institute (IW) has calculated that growth over the coming decade will then be around half a per cent lower than without an increase in the tax burden. It would be even worse if the young contributors indirectly cancelled the intergenerational contract. The parties would then have to answer for the fact that they failed in the years when reforms were still possible, and saw migration not as an opportunity but as a threat.