There's supposed to be a face-to-face meeting this week between Merkel's CDU Party and the partner SPD Party.....to discuss 'Basic Pension'. Apparently, yesterday.....it was decided that the homework isn't done yet, and that meeting got pushed back (at least til next week).
So what is this whole 'Basic Pension'?
If you were a German, and from age 15 to age 65....you worked hard, but you never got what you'd call a great wage or work-situation....then you could be standing there at age 66 to retire, and the meager pension level is 600 Euro a month. Germans will tell you that this level of pension won't work. In fact, you could retire with 700, 800 and even 900 Euro....with Germans telling you that it won't work.
What happens to these retirees? They basically end up on some welfare game, and living on the edge of society. How many Germans are in this situation? The general estimate is a million Germans....but alot of this matters over where you consider welfare status and where you draw the line.
The corrective action? You'd go and invent this allowance to flow to the retiree (maybe 100 Euro.....maybe even up to 450 Euro....to get them to a 'safe' level).
Problems? There are three basic problems here.
1. Where do you get the money for this? Raise more taxes?
2. If you admit this is a problem.....why isn't welfare itself on the table to talk about the non-retired folks?
3. Then you come to this serious issue....what if 'Hans' didn't take actions at age 20 or age 30....to move himself up?
An example....'Hans' sets up a small and marginally profitable business. He's basically got enough income to pay for his vehicle, his health insurance, taxes, basic pension contribution, and maybe three hundred Euro a month for pocket money....but lives with his girlfriend who has the 'big' income. Upon retirement, 'Hans' only gets in the 300 to 400 Euro range.
'Hans' picked this lifestyle and has zero interest in working that much. So at age 66....'Hans' is smiling because he avoided contributing into the pension pot, and he's now relying upon you to toss the extra money into the pot.
A lot of Germans will voice the opinion that they don't want to sponsor a bunch of 'Hans' in this CDU-SPD scheme.
I might even look at this myself, and take the idea....maybe around age 50....I'll just ask for a 30-hour a week job, contribute a lot less into the pension pot, and be taking free money at retirement.
So this program is loaded with problems and guaranteed to really hype the public in various ways (in a negative sense).
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