Government’s mortgage interest subsidy, besides creating a lot of social costs, benefits almost solely the rich, yet it’s precisely the rich who boldly claim to want to scrap the programme. What’s going on?
Public spending
Ultimately, how to resist the Obamamania that is ruining the United States?
The staff costs are higher at the Banque de France than in the Bundesbank! This is one of the conclusions of our comparative study “Banque de France vs Bundesbank”. On the one hand, 1.45 billion euros, in the other hand, 700 million euros! Regarding pension costs, the comparison also makes a significant difference: 440 million euros in France compare to the Bundesbank’s 100 million. With this precision: the Bank of France pensions are not funded …
It seems logical: economic growth resumed in the United States, and since the United States used an economic stimulus thanks to budget deficits, it could be believed that public spending lead to recovery. Indeed, but… it is in the sectors that did not benefited from the Federal money that new companies and new jobs were created. And in States that have reduced their public spending (as in some European countries).
It is the stunning figure revealed by Jean-Philippe’s Delsol in his book “Why I Am Going To Leave France”, an IREF bestseller.
Between the public sector (5.2 millions), the parapublic sector (2 millions), those who are granted the public allowance called “Active Solidarity Revenue” (1.3 millions) and those who are granted direct or indirect public allowances (6 millions), the total amount of the French people receiving public money is superior to those working in the private sector!
Attacks against wealthy people are still going on in spite of the fact the Welfare-State is plundering taxpayers. In a recently published book, sociologists – I should say ideologists – Michel and Monique Pionçon-Charlot are criticizing those they call “deliquents”. No, wealthy people are not offenders or delinquent. They are above all those who create jobs.
According to a Eurobarometer / TNS Opinion, only 50% of the French people have a good opinion of their government whereas 46% have a bad opinion (4% are undecided). In Germany, the government gathers 73% favorable opinion and 23% unfavorable opinions (4% were undecided). Yet, in 2013 public spending in Germany reach 45.4% of GDP against 57.2% in France. A huge difference – 12 points – which does not contribute to the improvement of our public sector. That is a good reason to reduce spending.
The crisis of the world economy since 2008 has encouraged various governments to increase the share of public spending. This increase was a general phenomenon among the OECD countries and contributed to an unprecedented debt hike. An IREF study comparing the development of key economic indicators over the recent period (1997-2011) for some 30 OECD member countries makes it possible to update the link between public spending and economic growth in the light of the first impact of deficit spending between 2008 and 2009.
Reforming is a path for reelection: German Chancellor Angela Merkel privatized, deregulated, capitalized. She did not reflate nor accepted deficits : she reduced taxes. For sure, there are some lessons to learn for France.
WP 2013-05. Executive Summary Although it is generally agreed that government size has a negative impact on economic growth, it is also manifest that the intensity of this causal relationship…