Economist Calls for Increased Defense Spending, Higher Retirement Age
The President of the Kiel Institute of World Economics, Moritz Schularick, is urging greater participation of retirees in higher defense spending. In an interview with the Spiegel magazine, the economist stated that in the long run, it will not be possible to achieve significant increases in defense spending without cuts and reallocations in the budget.
To reach substantial sums, one will have to touch the pension system, Schularick said. He is advocating for a higher retirement age, and to freeze the standard of living of retirees at its current level by means of an inflation adjustment. The economist criticized the expected 3.5% increase in pensions this year, calling it “hard to justify in a stagnant economy.”
Schularick also attempted to pit the generations against each other, saying that the older generation failed to invest sufficiently in the country’s security in the past decades, instead consuming the peace dividend. He added that the older generation also failed to make the pension system sustainable for the future.
Therefore, it would be challenging for the older generation to refuse to contribute to the strengthening of defense, the economist said, especially since the younger generation already needs to service the debts incurred for this purpose.
Recently, the Green party’s chancellor candidate and Vice-Chancellor Robert Habeck suggested increasing Germany’s defense spending to 3.5% of its economic output, which would nearly double the current level. Chancellor Olaf Scholz (SPD) responded to this proposal by asking who would pay the bill.
Schularick criticized Scholz’ comment, calling it “irritating.” He said that because Scholz is pretending there is no bill to pay, the country will not increase its defense spending and will ultimately be left without the means to defend itself. The economist argued that security is not a luxury good, but an existential task of the state and therefore also of the Chancellor.