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Political Drama: French Welfare State Showdown
I wrote last week about President Macron’s very modest effort to slow down the growth of the welfare state and started with a chart showing that France has the highest overall burden of government spending in the developed world.
The good news (relatively speaking) is that France is in third place, based on this chart from the OECD, when looking at the burden of government-provided retirement benefits.
To be sure, having the third-highest burden of retirement spending is hardly something to celebrate. And it is not exactly a big achievement to be slightly less worse than Greece and Italy.
This is why President Macron is pushing to increase the retirement age from 62 to 64.
But French voters and French lawmakers have an entitlement mentality and Macron’s initiative was faltering. So the government used executive authority to unilaterally impose the law.
Needless to say, this has triggered a lot of outrage. Here are some details from an article by Rich Noack in the Washington Post.
The French government used its executive powers Thursday to raise the retirement age to 64 and avoid a vote on an unpopular bill, outraging lawmakers who could retaliate with a no-confidence motion… Two-thirds of the French public have opposed the plans, and within minutes of Borne announcing the law’s adoption,
demonstrators assembled near Parliament for their ninth day of mobilization, with some of them clashing with authorities. …Macron has been pushing for changes to the country’s pension system since he was elected in 2017… France has a lower minimum retirement age than many of its European neighbors… Germany, for instance, is preparing for an increase in the retirement age from 65 to 67, and lawmakers there have faced little public backlash. …Macron and his allies argue that the retirement age needs to reflect that increase if the country wants to preserve a welfare system that relies on a sufficiently large base of working-age contributors.
Here’s a chart from the article to show the excesses of the French system.
The Wall Street Journal opined this morning on the controversy.
The political difficulty of reforming pensions in Western democracies has been on display in France, with strikes and mass protests against Emmanuel Macron’s modest pension reform. …Give Mr. Macron credit for persistence—and political brass. …Thursday Prime Minister Elisabeth Borne invoked Article 49 of the French constitution, which enabled the Macron government to strong-arm a bill through the National Assembly without a vote.
The National Assembly’s remaining recourse to block reform is to pass a motion of no confidence. That would block the legislation, oust Ms. Borne, and dissolve the government. …The opponents are on the populist left and right, including his presidential opponent in 2022, Marine Le Pen, who accused Mr. Macron of choosing “to govern with brutality” and called for Ms. Borne’s ouster. The cold reality is that France needs reform because its pay-as-you-go pension system is unsustainable. The retirement age is 62, one of the youngest in Europe, and Mr. Macron would stretch it only to 64 with some exceptions. The worker-to-retiree ratio has shrunk to 1.7 to 1 from 3 to 1 in 1970. French pensions already consume 14% of the economy.
The second-to-last sentence of the above excerpt deserves some emphasis.
Back in 1970, there were three workers (taxpayers) for every retiree. Now the ratio if 1.7 workers to every retiree, and that situation is going to get much worseover the next few decades (the same problem of demographic change exists in the United States).
So the real-world choice is reform or bankruptcy (especially since taxes already are maxed out).
P.S. Macron’s reform is better than the status quo, but it would be far better to shift to personal retirement accounts – which is something that has happened in dozens of nations.
January 31, 2021
President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500
Dear Mr. President,
The federal government debt is growing so much that it is endangering us because if things keep going like they are now we will not have any money left for the national defense because we are so far in debt as a nation. We have been spending so much on our welfare state through food stamps and other programs that I am worrying that many of our citizens are becoming more dependent on government and in many cases they are losing their incentive to work hard because of the welfare trap the government has put in place. Other nations in Europe have gone down this road and we see what mess this has gotten them in. People really are losing their faith in big government and they want more liberty back. It seems to me we have to get back to the founding principles that made our country great. We also need to realize that a big government will encourage waste and corruption. The recent scandals in our government have proved my point. In fact, the jokes you made at Ohio State about possibly auditing them are not so funny now that reality shows how the IRS was acting more like a monster out of control. Also raising taxes on the job creators is a very bad idea too. The Laffer Curve clearly demonstrates that when the tax rates are raised many individuals will move their investments to places where they will not get taxed as much.
______________________
17 Reasons the large national debt is a big deal!!!
We got to stop spending so much money and start paying off our national debt or the future of our children and grandchildren will be very sad indeed. Everyone knows that entitlement spending must be cut but it seems we are not brave enough to do it. I have contacted my Congressmen and Senators over and over but nothing is getting done!!! At least there are 66 conservative Republicans in the House that have stood up and voted against raising the debt ceiling.
June 17, 2013 at 7:13 am
Remember the debt? That $17 trillion problem? Some in Washington seem to think it’s gone away.
The Washington Post reported that “the national debt is no longer growing out of control.” Lawmakers and liberal inside-the-Beltway organizations are floating the notion that it’s not a high priority any more.
We beg to differ, so we came up with 17 reasons that $17 trillion in debt is still a big, bad deal.
1. $53,769 – Your share of the national debt.
As Washington continues to spend more than it can afford, every American will be on the hook for this massive debt burden.
SHARE this graphic.
2. Personal income will be lower.
The skyrocketing debt could cause families to lose up to $11,000 on their income every year. That’s enough to send the kids to a state college or move to a nicer neighborhood.
3. Fewer jobs and lower salaries.
High government spending with no accountability eliminates opportunities for career advancement, paralyzes job creation, and lowers wages and salaries.
4. Higher interest rates.
Some families and businesses won’t be able to borrow money because of high interest rates on mortgages, car loans, and more – the dream of starting a business could be out of reach.
5. High debt and high spending won’t help the economy.
Journalists should check with both sides before committing pen to paper, especially those at respectable outlets like The Washington Post and The New York Times. A $17 trillion debt only hurts the economy.
6. What economic growth?
High-debt economies similar to America’s current state grew by one-third less than their low-debt counterparts.
7. Eventually, someone has to pay the nation’s $17 trillion credit card bill, and Washington has nominated your family.
It’s wildly irresponsible to never reduce expenses, yet Washington continues to spend, refusing to acknowledge the repercussions.
>>>Watch this video to see how scary $17 trillion really is for your family.
8. Jeopardizes the stability of Medicare, Social Security, and Medicaid.
Millions of people depend on Medicare, Medicaid, and Social Security, but these programs are also the main drivers of the growing debt. Congress has yet to take the steps needed to make these programs affordable and sustainable to preserve benefits for those who need them the most.
9. Washington collects a lot, and then spends a ton. Where are your tax dollars going?
In 2012, Washington collected $2.4 trillion in taxes—more than $20,000 per household. But it wasn’t enough for Washington’s spending habits. The federal government actually spent $3.5 trillion.
>>> Reality check: See where your tax dollars really went.
10. Young people face a diminished future.
College students from all over the country got together in February at a “Millennial Meetup” to talk about how the national debt impacts their generation.
>>>Shorter version: They’re not happy. Watch now.
11. Without cutting spending and reducing the debt, big-government corruption and special interests only get bigger.
The national debt is an uphill battle in a city where politicians too often refuse to relinquish power, to the detriment of America.
12. Harmful effects are permanent.
Astronomical debt lowers incomes and well-being permanently, not just temporarily. A one-time major increase in government debt is typically a permanent addition, and the dragging effects on the economy are long-lasting.
13. The biggest threat to U.S. security.
Even President Obama’s former Chairman of the Joint Chiefs of Staff thinks so:
SHARE this graphic.
14. Makes us more vulnerable to the next economic crisis.
According to the Congressional Budget Office’s 2012 Long-Term Budget Outlook, “growing federal debt also would increase the probability of a sudden fiscal crisis.”
15. Washington racked up $300 billion in more debt in less than four months.
Our nation is on a dangerous fiscal course, and it’s time for lawmakers to steer us out of the coming debt storm.
16. High debt makes America weaker.
Even Britain’s Liam Fox warns America: Fix the debt problem now, or suffer the consequences of less power on the world stage.
17. High debt crowds out the valuable functions of government.
By disregarding the limits on government in the Constitution, Congress thwarts the foundation of our freedoms.
Read the Morning Bell and more en español every day at Heritage Libertad.
_____________
Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.
Sincerely,
Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733,
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By Everette Hatcher III | Posted in Current Events | Edit | Comments (0)
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