IIt was enough for INSEE to announce a worsening public deficit in 2023 to trigger a lively debate. We could brush it aside: a few tenths of a point more in GDP hardly weaken France’s position at a time when deficits are also slipping in the United Kingdom and even more so in the United States (6.3% in 2023).
The argument of an unsustainable public debt for future generations is no more convincing unless one thinks that the entire advanced world would be threatened. The French public debt per young person under 15 is thus commonplace within the G7: around 260,000 euros, compared to, after conversion, the equivalent of 130,000 in Canada, 220,000 in Germany, 270,000 in the United Kingdom. , 380,000 in Italy, nearly 450,000 in the United States and… 600,000 in Japan.
However, France’s deficit is worrying. Worrying, because it is used to justify public policies of cuts in public service and transition budgets, and soon in social benefits. Worrying, because the leaders of two large institutions independent of politics – Banque de France and Court of Auditors – had reactions that could easily be described as ideological: we must take care “finally seriously expenses” for the first, and “a collective preference for spending” for the second.
However, questions about recipes are legitimate. The current deficit comes from their relative deterioration. They are estimated by INSEE at 51.9% of GDP in 2023, compared to 54.2% in 2017. The Prime Minister is talking about taxing rents, but isn’t this fall precisely the indicator of the rents thus generated? ? First by the rent seeking (“rent-seeking”), the ability to influence public decision-making in one’s own interest: how can we in fact understand that corporate tax has been lowered, production taxes cut, without calling into question a multiplicity of public spending (research tax credit, subsidies) and doors open to tax optimization, precisely in the name of the excessively high burden of these taxes?
Increasingly tangled socio-fiscal system
Then, through market rents, both on consumers and on workers: the rise in corporate margins adds to the erosion of public revenue, with capital now being taxed much less than labor.
Responding to citizens’ perplexity about spending would also be useful: how can increased spending translate into weakened public services? The twists and turns of an increasingly tangled socio-fiscal system nevertheless offer avenues.
You have 36.56% of this article left to read. The rest is reserved for subscribers.