this is so embarrassing. here, spain's ruling party (the socialist party, PSOE) is boasting that the social security reserve fund ("la hucha de las pensiones") has grown from €5bn in 2018 to €20bn in 2026. that would be good news if it wasn't for the fact that the pension system has been running a deficit since 2010, so every euro that goes into the fund is a euro the state has to cover with taxes or debt! the fund was established in the late 1990s with the idea of storing the system's surpluses in good years to then draw on them when contributions fall short in bad years. it peaked at around €67bn in 2011 (about €85bn in today's euros, or 6.2% of gdp). then the crisis hit, the system went into deficit, and between 2012 and 2019 governments used the fund to pay pensions, which is (surprise) precisely what it was designed for. so this is what the picture is telling you: on the left, the popular party (PP), which left office in 2018 having drawn down a large part of the fund. on the right, the PSOE, taking credit for having refilled it. the problem is that today the size of the fund tells you nothing about the health of the system, and selling its recent growth as an achievement only works if you assume people are stupid spain has a contributory, fully pay-as-you-go pension system: the social contributions of today's workers pay for the pensions of today's retirees, and what you pay in is not saved for you anywhere. since 2010 the system has run a contributory deficit, meaning the contributions being paid into the system are not enough to pay the pensions of current retirees. the exact size of this deficit depends on how you measure it (what counts as contributory revenue and spending is a bit of a technical discussion), but roughly speaking, contributions cover about three quarters of contributory spending (which is mostly pensions). the remaining quarter is the deficit: more than €60bn a year, around 3.8% of gdp, covered mostly with transfers and loans from the state, that is, with general taxes and debt. social security already owes the state more than €135bn so where the hell does the recovery of the reserve fund come from? since 2023 workers have been paying an extra social contribution, the so-called intergenerational equity mechanism (MEI, after its spanish initials). it is an earmarked contribution that generates no pension rights (that is, paying it does not add a single euro to your future old-age pension). by law, its revenue can only go straight into the reserve fund, which cannot use it to pay pensions before 2033 now, we've already established that the system runs a contributory deficit, so every year it needs transfers and loans from the state just to pay pensions. do you see how stupid this is? if the system is running a deficit, putting the MEI money into the reserve fund is like having credit card debt and, when some extra money comes in, putting it in a savings account instead of paying down the card. meanwhile, you keep putting your bills on the card, the debt keeps growing, and you go around showing everyone your savings balance. that is pretty much what is happening: since the end of 2022 the fund has grown by about €12bn, while social security's debt to the state has grown by about €30bn. and it gets more absurd, because the fund invests almost all of its money in spanish government bonds (in other words, the state is lending money to itself) anyone who can do basic maths can see this isn't saving under any reasonable definition of the term. the system can't pay the pension bill without the state bailing it out every year, and the governing party's big idea is to celebrate that it has taxed workers to lend money to itself. it is honestly sad that this is the level of spanish politics