Germany is poor, but not in terms of commodities, services, income, or capital. Germany is poor in terms of opportunities for the future. The reason is simple: in the future, the adults, children and newborns of today will have to pay off the debts and obligations that are currently being incurred. And that's a tough spot to be in.
In 2013, Germany's national debt amounted to 72.5 percent of its annual GDP, and that percentage is decreasing. The federal government aims to meet the Maastricht limit -- which dictates that the debt-to-GDP ratio must not exceed 60 percent. But is that really a reason to sit back and relax?
No. Because these state debts are only the so-called explicit debts. The German government has other financial obligations, such as federal bonds, which we will all have to pay for in the future. These include, for example, pensions for civil servants. Many of these programs were established in the '70s. Many of these civil servants will enter a well-deserved retirement in the next few years, and they will expect their pensions to be deposited on time. But there are basically no financial precautions in place to ensure that. That money will have to be paid out of the state's normal tax income.
The social security benefits for employees are also being dangerously overdrawn. Every year, the state transfers a multi-billion-euro subsidy into the retirement fund (in 2016, for example, it deposited 14 billion euros) so that all retirees may be paid the pensions they're entitled to fully and on time. That subsidy must also be earned back in taxes every year.
And the same is true, of course, for a number of other social services: basic pension, integration assistance for people with disabilities, housing support, supplementary unemployment benefits, medical care and health insurance for low-income citizens, etc. Individually, all these payments make sense. Collectively, they represent massive sums of money -- which in the future will need to be earned back and paid out again.
These promised payments are considered "implicit debts" because -- like regular debts -- they have to be paid. There's no question of choice anymore -- the obligation to pay up is written in the constitution. The difference between explicit and implicit debts is called the sustainability gap; In 2013, this gap was a full 237 per cent of the GDP -- a whopping 6,484 billion euros.
If Germany were a business, we would need to build up reserves equivalent to that amount. But because that will not be done, we are going to have to finance these sums out of the running income in the future. This may mean that in the future, less money will be available for such expenditures as education, infrastructure, or research. In other words, the sustainability gap impoverishes our chances for the future -- and it is the weakest members of our society who will suffer most as a result.
Today, successful German businesses would rather invest abroad than in aging Germany.
Many of the measures taken by the Great Coalition have made the sustainability gap worse, including changing the retirement age to 63 and providing supplementary income for mothers. But the biggest reason behind the size of the sustainability gap is demographic change.
If fewer and fewer young people are financing services but more and more older people are demanding those services (namely pensions, social security, health and medical services), then the gap keeps growing and the leeway for the future keeps declining.
Migration would be a very effective measure to reduce the sustainability gap. Migrants are generally younger than Germans, and so over the course of their lifetimes, they can finance more services than they demand.
The important thing is for migration to be taxed, and for it to be tailored to the demands of the German labor market. For example, it would be most helpful for the German labor market to receive workers in the manufacturing and medical sectors.
According to calculations by Professor Raffelhüschen, a sustainability researcher, the right migration law could reduce the German sustainability gap from 237 percent to 217 percent. These numbers show that even migration would be only one among many measures needed to fight for Germany's impoverished future.
But it would also be tragic to fail to take advantage of that part of the solution. Because a shrinking and aging population could quickly lead to a future of poverty -- without migration, Germany shrinks by about the size of a city of 150,000 to 200,000.
Today, successful German businesses would rather invest abroad than in an aging Germany. As a result, fewer jobs and less value are created at home. Only the rich can afford a shrinking society. And the impoverished future will become an impoverished present faster than we think.
This post first appeared on HuffPost Germany. It has been translated into English and edited for clarity.