The Special Fund

In the beginning was the Word. Debt is now called Special Assets. Consumption is now called Investment. The shell game is now called fiscal policy. Reality has not changed. Only its designation. And that, according to the logic of the system, is enough.

I. The Arithmetic of the Switching Yard

The numbers are simple. The German federal government took on 24.3 billion euros of new debt in 2025 through the so-called Special Assets fund. Compared to the previous year, actual investment rose by 1.3 billion euros. The gap is 23 billion euros. The misappropriation rate — a term the Ifo researchers had to coin because no word yet existed for this procedure — stands at 95 percent.

What happened? The mechanism is as simple as it is brazen. The federal government identified line items in the regular budget for which investment funds had previously been earmarked — the broadband rollout is the most graphic example: 1.2 billion euros from the core budget in 2024, completely eliminated in 2025. The money still flows — but now from the Special Assets fund, i.e. on credit. The funds thereby freed up in the core budget can be used for any purpose whatsoever. For restaurant VAT reductions. For mothers' pensions. For fax paper. For heating government offices.

The result: Germany takes on significantly more debt than before — and invests barely more than before. The debt brake has not been reformed. It has been circumvented by a change of labelling.

II. Language as Tool

Peter Sloterdijk described this class of politicians years ago: the debt acrobats. People who believe that the loss of trust can be remedied by issuing pseudo-money. What he then formulated as philosophical diagnosis has since become budget practice.

The word "Special Assets" is not accidental. It is programmatic. Assets are something positive — something one has, that belongs to one, that provides security. The word "debt" by contrast carries negative connotations — it implies obligation, risk, loss. So the debt is called assets. And "special" is added — because the special is always praiseworthy.

This is magical thinking in its governmental form. Not the faith healer who heals with words. But the finance minister who invests with words. Reality does not change. But its designation protects the one who has changed it from the consequences of the change.

When the Ifo researchers presented their findings — 95 percent misappropriation — they fell, by their own account, out of all the clouds and recalculated three times. What surprised them was not the number. It was the shamelessness. The open, systemic, planned shifting. The Federal Finance Ministry examined, as the Budget Committee chair describes it, "every single budget line" and systematically emptied them. This is not error. This is method.

III. The Schäuble Paradox

Wolfgang Schäuble devoted his political life to the balanced budget. His political testament, now recalled by a former CDU Secretary General, reads: politicians should not be given more money. They do not handle it responsibly enough.

Friedrich Merz held this position for years — pointedly, convincingly, with the authority of the fiscal politician who knows the subject. Until his election as Federal Chancellor. Then he took over the government — and with it the logic of the system he had combated.

This is not hypocrisy. Hypocrisy would be if he thought something different inwardly from what he said. What is happening here is structural in nature: the system did not corrupt Merz. It shaped him. Whoever wants to become Chancellor must form coalitions. Coalitions have prices. The price of this coalition was called Special Assets — and the SPD collected its share in the form of social expenditures now disguised as "investments".

Merz has become a stranger to himself — as Gabor Steingart formulated it. That captures the matter precisely. Not a bad person made a bad decision. A functional system drew a decent person into its logic.

IV. The Consequences of Consequencelessness

Germany will grow in 2026 — if at all — by 0.8 percent. That is the result of a fiscal policy that takes on 24 billion euros of new debt and achieves 1.3 billion euros of additional investment for it. The investment gap continues to grow. Infrastructure continues to decay. Competitiveness continues to shrink.

And nobody is accountable. The Finance Ministry declares the study findings wrong. The chief economist of the Vice Chancellor speaks of "temporary teething problems" and points to planning figures for the future — planning figures which, as the Ifo president drily notes, are "usually far too optimistic." The coalition continues. The debt grows. The investment gap grows. The economy shrinks.

Opposition votes are insufficient to refer the matter to the Federal Constitutional Court for review of its constitutionality. Constitutional complaints are already being contemplated — but they take time. And by the time they are decided, the money will long since have been spent, the debt long since incurred, the consequence long since deferred into the future — to those who are not yet permitted to vote today.

V. What This Means

The Special Assets fund is not a German special case. It is a particularly well-documented instance of a universal pattern: when a system provides no consequences for bad decisions, bad decisions become the rational strategy. Whoever incurs debt today and calls it investment wins today — and does not pay tomorrow, because tomorrow someone else governs.

The Budget Committee chair Lisa Paus says it causes her genuine pain — "in the soul, physical pain" — to watch. That is honest. But soul pain is not a consequence in the political sense. The architects of the switching yard sleep well.

The philosopher was right: in their continuation on a false course lie the sources of all demoralisation. What he did not add — perhaps because it was too obvious: the continuation on a false course is not a mistake. It is the system. It is rational as long as nobody is accountable. And nobody is accountable.

The Special Assets fund is not the symptom of broken politics. It is the proof of functioning politics — a politics that is perfect at financing its own continuation without paying the price for it. Others pay. Later. With interest.