Germany is grappling with a fiscal squeeze on its social safety net. An esteemed economist warns that we must be blunt about what benefits can really be afforded and what must be trimmed, insisting that long-run entitlements in pensions, care, and health insurance can’t be sustained at current trajectories. The notion of a “haltelinie” for pensions signals that even cherished promises may have to be dialed back. Already, a hefty portion of gross income—roughly 42 percent—flows into social funds, with care costs on the rise; those who can finance their own care should do so to keep the system afloat, implying that some benefits may be curtailed. Payroll costs sit around 42 percent and could edge toward 45 percent by the end of the term, which makes employment more expensive and, dare I say, less attractive. A Bund-Länder working group under Nina Warken is drafting long-term care reform, amid significant deficits in the care funds. The cabinet has pushed a pension reform intended to stabilize levels through 2031 and to raise pensions for millions of mothers; this reform is partly tax-funded and will lift the employee contribution rate from 18.6 to 18.8 percent from 2027. A commission will begin in 2026 to tackle broader, lasting reforms of how the pension system is financed, though disagreement persists between CDU/CSU and SPD on the path forward.

One might think this is the stuff of dreary bureaucrats, yet it is the very theatre in which a nation’s self-regard is either disciplined or indulged. The rhetoric of honesty about affordability is admirable in a ceremonial sense, but it conceals a deeper truth: when benefits are imagined as invincible, private savings and private initiative wither. The haltelinie is not a moral limit but a tragic arithmetic one, and the moment you cross it, you invite the disintegration of the very consumer class that keeps an economy alive. To my mind, nearly half of a citizen’s income vanishing into public coffers is not a sign of virtue but of a maladroit social contract, one that smothers ambition while patting itself on the back for “compassion.” And let us not pretend that raising mothers’ pensions and shoveling more funds into care will be free; the price tag will be borne by workers, and by business—through higher payrolls, fewer hiring incentives, and perhaps a slower ascent for Germany’s once-magnificent productivity.

If I were advising these councils of the prudent and the pious, I would urge speedier, sharper reforms that protect those most in need while unleashing private capital and competition. Targeted, means-tested support should replace broad, untargeted promises; private long-term care insurance should be encouraged as a complement, not a substitute for a bloated safety net; and the tax system should be calibrated to reward work and investment rather than to punish them with perpetual, rising payroll taxes. A disciplined approach to reduce payroll load, coupled with a credible plan to restore savings and investment discipline, would do more for the health of the economy than another round of cosmetic increases funded by taxes. And yes, I would insist that any broad reform be anchored in a clear horizon: what is the long-term objective, what must be private and what must be public, and how will we measure real improvements in living standards beyond the next political cycle? Until those questions are answered with candor and spine, the discourse will continue to entertain the public while the ledger grows more grey. In such moments, one must remember that a nation’s generosity is not a substitute for its competence, nor a substitute for the obligation to build a future that can actually be afforded.