"People will always have children." This is supposedly what Chancellor Konrad Adenauer said — himself a father of seven — in 1955, when the question arose as to which pension system the still young Federal Republic should adopt. Under Adenauer's leadership, it was decided that Germany would adopt a generational contract: The working population would finance pensioners by paying a percentage of their salaries. But the system could only work if the birth rate remained high and life expectancy low. In 1955, statistically speaking, every woman gave birth to 2.3 children, and the trend was rising. In 1964, a total of 1.35 million children were born in what was then still a divided Germany. It is not for nothing that the generation born between 1950 and 1964 is known as the baby boomer generation. Germany is aging rapidly But then came the 1970s, when the wide availability of effective contraception led to a drop in the birthrate. In 1975, there were only around 785,000 births in Germany in total, and the annual number of new babies has not increased significantly since then. This means that the German population is aging, which has serious consequences for the pension system. The Federal Statistical Office estimates that by 2039, one-third of all people currently employed will retire. "Younger age groups will not be able to replace the baby boomers in terms of numbers," statisticians emphasized. This will be felt in the economy as the number of skilled workers decreases and as the intergenerational contract established by Adenauer to pay for pensions is faced with seemingly insurmountable problems. "In the long term, this will put pressure on the social security system, because more people will have to be supported by fewer contributors and taxpayers," Stefan Kooths of the Kiel Institute for the World Economy (IfW) told the Reuters news agency. "Overall, this will exacerbate conflicts over distribution." Employees and companies who make contributions to the pension fund will see their pension fees rise. And this, according to Kooths, will also make Germany a less attractive location for investment and skilled workers. This could result in a downward spiral of rising tax rates and an exodus of qualified workers, who are generally also the most mobile. Don't mess with the (old) voters The intergenerational contract established by Adenauer has been growing less functional for years. In 1962, six employees financed one pensioner. In 2020, the figure was 1.8 employees, and the trend is declining. Although politicians have long recognized that the the current pension system has reached its limits, little has been done about it. On the one hand, this is because politicians do not want to upset older voters and impose cuts on them. On the other hand, Germany has had high levels of immigration over the past ten years, which has temporarily softened the effects of the demographic change. German coalition disputes welfare state funding