[SkiFire13]

But I'm paying taxes for my pension, and my kids will pay taxes for theirs.

I know that the economics don't actually work like this, but this is the social contract.

[myrmidon]

You need to pay taxes and have kids for the numbers to work out.

If your pension benefits are calculated based on a 4 workers/retiree ratio, but then your whole generation has like 1 kid per family then the system will obviously break down...

[triceratops]

But why? That would imply a worker 30 years ago produces only as much as a worker today. Which is obviously untrue.

[myrmidon]

No, it would only imply that the worker/retiree income ratio (and tax/pension burden) are somewhat constant which is arguably the case; german pensions specifically rise with wages and get adjusted for inflation.

Productivity gains on the other hand get easily eaten up by increased consumption/expectations, or are overstated to begin with: producing 5 times more TVs/ipads does not make the plumber cheaper (nor a house), and unaffected professions actually suffer (=> baumol effect).

[triceratops]

> german pensions specifically rise with wages

Is that because higher earners make higher contributions to the pension plan?

[myrmidon]

No, it is because pensions are scaled (yearly) proportionally to wages (simplified, the actual process is more complicated)

[triceratops]

People automatically get a higher pension because they make more money? Without actually paying more into the system? That's an obviously flawed and unfair system, bound to fall over no matter what.

[SkiFire13]

As I said, this is how the economics of pensions work.

But the social contract does not care about that.