National debt has reached a historic record level. Open and hidden liabilities total €19.5 trillion, equivalent to 454 percent of annual economic output. Within just one year, the sustainability gap increased by €4.1 trillion. Around one-third of the increase comes from social spending on health and long-term care insurance. (faz: 29.08.25) The pension crisis also makes a significant contribution to this.
Sustainability gap and national debt at record highs
Freiburg economist Bernd Raffelhüschen and his Generational Contracts Research Center have published alarming data. Explicit national debt amounts to €2.7 trillion. Implicit obligations for pensions, healthcare, and long-term care total €16.8 trillion. This disparity demonstrates the severe strain the sustainability gap is placing on public budgets.
The Market Economy Foundation warns: The 2025 pension package will increase implicit debt by 17.7 percentage points of GDP. Without a change of course, up to 31.3 percent of federal tax revenues will flow into pensions in the future. Social spending in particular is further driving this increase and exacerbating the sustainability gap.
Pension package as a risk for future generations
The previous Pension Package II already increased the gap by almost 40 percentage points. Generational capital only reduced it by four points. This development particularly affects young people, who are faced with higher taxes. As a result, the pension crisis is inexorably approaching.
Political decisions such as generous pension packages endanger stability. Experts point to the need to link the retirement age to life expectancy. At the same time, skilled immigration and a genuine capital stock should mitigate the pension crisis in the long term.
National debt forces drastic adjustments
The Market Economy Foundation highlights the scale: Only drastic cuts will close the gap. Either spending will fall by 14.2 percent or revenue will increase by 16.8 percent. Without adjustments, the sustainability gap threatens to grow further.
Raffelhüschen emphasizes that even cautious assumptions reveal significant risks. Social spending has been rising for years and is placing a massive strain on future budgets. National debt and the pension crisis clearly demonstrate how threatened financial stability is.