Skip to comments.The French Death Spiral
Posted on 10/22/2013 6:57:33 AM PDT by Kaslin
Theres a tendency in public life to exaggerate the positive or negative implications of any particular policy.
This is why I try to be careful not to overstate the potential benefits of reforms I like, such as the flat tax. Yes, we would get better growth and there would be less corruption in Washington, but tax reform would not be a panacea for every ill. Many other policies also need to be fixed to generate sustained prosperity.
Likewise, Im obviously not a fan of Obamacare, but I try to remind people that our system was already messed up even before Obama was elected. As such, repealing Obamacare while the right thing to do is just one of many things that need to happen to restore a competitive and efficient healthcare system.
Now that Ive warned about the risks of overstatement, Im going out on a limb to say that we may be at the point where France is taxing itself to the point of economic ruin.
One French budget expert warned that, the spiraling welfare debt was particularly abnormal and particularly dangerous and that The strategy of fixing the system by collecting new revenue is reaching its limits.
And even a European Union Commissioner thinks France has gone too far. As one newspaper reported, Tax increases imposed by the Socialist-led government in France have reached a fatal level, the European Unions commissioner for economic affairs said today. Olli Rehn warned that a series of tax hikes since the Socialists took power threatens to destroy growth and handicap the creation of jobs
You know youre taxing too much when even Euro-crats in Brussels think the fiscal burden is excessive!
Ive certainly added my two cents to this discussion, but I suspect people will be more willing to believe someone who endures the French fiscal regime every day.
And thats our topic for today. A woman from France has written a very powerful indictment of Frances coercive and confiscatory economic system. Here are some excerpts from the UK-based Telegraph.
More than 70 per cent of the French feel taxes are excessive, and 80 per cent believe the presidents economic policy is misguided and inefficient. Worse, after decades of living in one of the most redistributive systems in western Europe, 54 per cent of the French believe that taxes of which there have been 84 new ones in the past two years, rising from 42 per cent of GDP in 2009 to 46.3 per cent this year now widen social inequalities instead of reducing them.
Some of you may be wondering why French voters elected a socialist if they overwhelmingly think taxes are too high, but keep in mind that the former President was just as much of a statist.
Im curious, by the way, about the data on taxes and social equality. Why do the French think higher taxes increase inequality? Is it that they think the higher taxes are being imposed on the middle class and the poor? Do they think that high taxes stifle growth and prevent upward mobility? Is it some combination of these factors, or something else altogether?
One thing we can say with certainty is that all these taxes have led to a bloated public sector.
By 2014, Frances public expenditure will overtake Denmarks to become the worlds highest: 57 per cent of GDP. In effect, just to keep in the same place, like a hamster on a wheel, and ensure that the European Central Bank in Frankfurt isnt too unhappy with us, Hollande now needs cash. finance minister Pierre Moscovici recently admitted that he understood the Frenchs exasperation with their heavy tax burden. This earned him a sharp rap on the fingers from the president Its not only that people dont like to be treated like criminals just because theyre successful, says a French banker friend who has recently moved to London. But this uncertainty in every aspect of the tax system means it is impossible to do business: you dont know what your future costs are, or your customers. You cant buy, you cant sell, you cant hire, you cant fire.
Not surprisingly, this hostility to achievement is having a predictable impact.
tax has been the clincher that sent hundreds, possibly thousands of French citizens abroad: not just the rich, whom Hollande, during his victorious campaign, said he personally disliked, but also the ambitious young, who feel that their own country will turn on them the minute they achieve any measure of personal success. one out of four French university graduates wants to emigrate, and this rises to 80 per cent or 90 per cent in the case of marketable degrees, says economics professor Jacques Régniez, who teaches at both the Sorbonne and the University of New York in Prague. In one of my finance seminars, every single French student intends to go abroad.
Heck, a majority of French people have said they would be interested in escaping to the United States if they had the opportunity.
However, those are the productive and ambitious young people of France. Unfortunately, theres another group of young French people, and they have different dreams.
young people, and many of their parents, dream of getting any kind of state or local administration post which ensures complete job security, unrelated to the economic situation, the market, or their own performance. More than a quarter of the French workforce is employed by some public body or other: schools, hospitals, local and regional councils, the police, the civil service proper or those new subsidised public-service jobs the Hollande government is so keen on.
We have people like that in the United States as well.
What matters for a society, though, it whether there are too many people living off the government. When the moochers and looters outnumber (and out-vote) the people who are producing, the conditions exist for an economic death spiral.
Simply stated, the folks riding in the wagon keep voting to impose heavier burdens on those pulling the wagon. That eventually leads to economic ruin, and it leads to trouble even faster when thepeople pulling the wagon have the opportunity to move across borders.
Which is what is happening in France.
P.S. Heres a powerful comparison of France and Switzerland.
P.P.S. More than 8,000 French households last year got to experience theObama-version of a flat tax.
P.P.P.S. Americans shouldnt feel superior to France since our tax code is worse in certain ways.
P.P.P.P.S. That being said, were not as bad as France, and even Obama wont be able to change that.
P.P.P.P.P.S. I endorsed the current socialist President of France, but for a strategic reason.
Young ambitious French people yearning to breathe free, come to America and help us breathe free again.
The strategy of fixing the system by collecting new revenue is reaching its limits.
i.e. “We’re running out of OPM.”
“You’ll be surprised you’re doing the French Mistake..Voila!”
Financial oligarchs (new world order) created a philosophy - socialism.
It’s a clever lie fed to the “little people”, i.e., those without much net worth.
It’s not a political movement - it’s a philosophical outlook on life. The big government has to save us from the big evil financial oligarchs. Join the effort to nationalize everything to get it out of the hands of big business.
Of course, nationalizing industries is actually handing them over to these financial oligarch monopolists - since they control the financing of the government and control the businesses (through their boards) that are awarded government contracts.
You would think the little people would catch on when they see the financial oligarch interests typically avoiding taxes, while the little people pay one tax or the other.
But the philosophy of socialism was successfully implanted in the public’s mind as being separate and distinct from the financial elites that created it.
The “spiral” is that the little people of the world keep looking to socialism to save them, when it was invented by the elites to enslave them.
Young ambitious French people yearning to breathe free, come to America and help us breathe free again.
Just like Demorats that leave a heavily taxed blue state and bring their politics with them into the low tax red state they migrate to, I fear that many of the French would bring the “disease” with them, and vote for big government largesse at every opportunity. Its in their blood.
P.S. I know a liberal couple that just moved to central Florida to escape high taxes in their blue state. They will support and continue voting for the same policies that caused them to leave the blue state.
Its a clever lie fed to the little people, i.e., those without much net worth.
Basically, a promise that you can have something for nothing. All it takes is a simple vote at the ballot box.
People whine about taxes, yet they will vote for statists out of fear of seeming cruel to the poor. Stupid policy. Fear God more than man.
The emigrants from Calachusetts left because of the high taxes and high crime and the poverty that impinged on their conscioiusness and the constant government meddling and regulation of their lives. They love their new state. At breakfast one morning Bill puts down his NYT and says, “Honey, this could be even better if there were a few more services.”
Every socialist's economic nightmare.
Isn’t it normal to complain about taxes?
It's not just in their blood, it's in their mitochondria. They invented socialism.
French - the ultimate Locust Voter.
Free lunch! Come and get your free lunch. Here, comrade, have a free sandwich. The bread for that sandwich was delivered with the free labor of the delivery driver. She is riding in a delivery van assembled with the free labor of workers on an assembly line. Heck, the tires for that van were produced by the free labor of the workers at the tire plant. And the fuel for that van? Why it was produced by the free labor of the workers at the oil refinery.And the fuel was sold by an employee working for free at a gas station. The bakery that made that bread has free employees. A truck driver, working for free, delivered the flour to the bakery. He was using some of that fuel produced by the free employees at the refinery. The mill that ground the wheat into flour did so with the labor of a bunch of people doing it for free. And of course, the electricity to run the flour mill was produced using the free labor of the people working for the electrical company. And that power came down lines that are repaired for free by free linemen. Now, the wheat for the flour is grown by farmers who work for free. They use a tractor that employees at a factory worked for free to build. The farmer used herbicides that scientists developed for free. The farmers also used fertilizer that fertilizer factory employees were only too happy to work for free to produce. Oh, and the farmer borrowed free money from the employees who work for free at the bank. So, you see, there is a lot of labor that goes into just making the bread for your free sandwich. I guess there’s some free labor required to chew that bread.”
There’s no such thing as a free lunch.
I love Paris. It’s a shame what’s happening. I think they can turn it around. It’s a great country to vacation to. The French get a bad wrap in our country, but I’ve met many of them and overall they were very nice people and they do love America and Americans.
I went there a few months ago, the countryside was awesome.
But damn they got a lot of Arabs in Paris.
A true and factual example of my tagline...
Remember that in the US, when considering the size of government, you have to consider Federal (about 24 to 25% of budget, up from 20 to 21% in past), State (maybe 8 to 10%), and City (depends... maybe another 4 to 6%, not sure here). When you add up US government, you get to somewhere over 40%, not counting various “mandates” which are a drag but hard to quantify.
My economist brother-in-law estimates total US government expenditures and passed along costs at roughly 45%, or did a few years ago.
To paraphrase Nixon about Keynes, “We are all socialists now.”
Its disconcerting, but nonetheless interesting, how acceptance of socialism and big government has spread within the GOP.
They won't be allowed in unless they are ethnically African or muslim.
Should be to hard for them to learn Spanish before they try entry
Yep. Spanish for local transactions; Arabic for federal.
Of course, there’s complaints, and then there’s COMPLAINTS!
A bad wrap can have you spending all night on the toilet.