Claudio Grass Interview with Carlos A. Gebauer

Claudio Grass Interview with Carlos A. Gebauer

“You can’t eat a cake that has not even been baked yet”

For quite some time now, I have been closely following news and reports out of Germany regarding the country’s pension system and the immense pressure it is under, placing those who support it and depend on it at great risk. Germany might be widely celebrated as the economic powerhouse of the EU and as its higher net contributor, supporting countries like Greece and Poland, and yet it would appear that the German state is now struggling to keep the promises it made to its own citizens. Old age poverty is on the rise, while the German pension system is steadily marching towards the edge of a cliff.

To get a better understanding of the factors that led up to this upcoming pension crisis and the systemic flaws that made it inevitable, I turned to Carlos A. Gebauer, who kindly agreed to share his insights and perspective on the matter.

Carlos A. Gebauer has studied Philosophy, Modern History, Linguistics, Law and Musicology. In addition to his work as a solicitor and specialist lawyer for medical law in Düsseldorf, he is a judge in the second senate of the Higher Lawyers’ Court of North Rhine-Westphalia and also serves as deputy chairman of the Friedrich A. von Hayek Society. As a Fellow of the Liechtenstein Academy, he teaches legal theory and rhetoric. Apart from his numerous scholarly legal texts in academic journals, he also writes for the FAZ, the NJW, the ZRP, Schweizer Monat, Schweizerzeit, the magazines Cicero and Pardon, Novo Argumente, The European, Achse des Guten, while he is a regular columnist for Freie Presse Chemnitz, Wirtschaftswoche and the Eigentümlich Frei magazine. He has published a number of books, among them “Warum wir alle reich sein könnten und wie unsere Politik das verhindert”, “Der Gesundheitsaffront” and “Rettet Europa vor der EU”.

Claudio Grass (CG): In order to understand much of what is wrong with the German pension system, I think it’s important, especially for our international readers, to understand its core foundations. Could you summarize for us the basic principles and the structure of German pensions?

Carlos A. Gebauer (CAG): There are still multiple and variously shaped methods to ensure one’s income in old age in Germany. As a rule, the starting point is the way someone earns his income during the time of his professional life. Apart from some exceptions, like certain freelancers or public servants, who run their own pension schemes, all other common employees have to take part in a compulsory and state-run retirement system. Thus, signing a labor contract automatically causes the employer‘s membership to the community of all compulsorily insured persons. And it is nearly impossible to circumvent this automatic and mandatory participation.

Central to this concept, stands a pay-as-you-go system, i.e. an unfunded retirement plan: A so-called intergenerational contract coerces today’s professionals to pay contributions that finance present retirees. The rights and obligations that result from this, entitles all members to have their own chance to get pensions out of this community coffer one day in the future.

CG: What are the historical roots of the government pension system and what was the political situation and the reasons for its implementation?

CAG: The idea of having such a state-run pension system goes back to the founding of the imperial “Deutsches Reich” in 1871. Only a few years after its formation, the ruling elites were increasingly confronted with the emergence of social disturbances. The spearheads of the working class challenged the state’s power. It then was Chancellor Otto von Bismarck who strived to diffuse this situation. As he wrote in his biography later, to achieve this, he corrupted his opponents by launching a system of so-called social security: „My leading thought was to win over – or should I say: to bribe – the working class by making the workers look at the state henceforth as an institution that in fact exists for their sake and is meant to care for them.“

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Rory Hall, The Daily Coin. Beginning in 1987 Rory has written over 1,000 articles and produced more than 300 videos on topics ranging from the precious metals market, economic and monetary policies, preparedness as well as geopolitical events. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver, Silver Doctors, SGTReport, and a great many more. Rory was a producer and daily contributor at SGTReport between 2012 and 2014. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Gerald Celente and Peter Schiff, to name but a few. Don't forget to visit The Daily Coin and Shadow of Truth YouTube channels to enjoy original videos and some of the best economic, precious metals, geopolitical and preparedness news from around the world.