Post B6aw7dvlmJ0G6jsdbE by ljrk@todon.eu
 (DIR) More posts by ljrk@todon.eu
 (DIR) Post #B6aw7d9Cgs9fg79qts by iamada@tech.lgbt
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       Wait, France has ran a deficit every year since 1970. What the ???
       
 (DIR) Post #B6aw7dUTPnAWk56q3M by iamada@tech.lgbt
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       I'm all for social security and having the government use your tax money fairly, but, it doesn't look like the French can actually afford their own social security system :neocat_woozy:Protesting can delay that, but will only create a bubble until you default and slide into recession...
       
 (DIR) Post #B6aw7dhad1f1OlFJUu by iamada@tech.lgbt
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       You know your economy is struggling when your Debt:GDP ratio is getting close to Greece. Do we need similar financial restrictions imposed on France?Otherwise, by 2030 Greece and France will have switched positions in terms of their ratios and credit ratings.
       
 (DIR) Post #B6aw7dvlmJ0G6jsdbE by ljrk@todon.eu
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       @iamada Comparing deficit vs GDP, albeit popular, doesn't really make sense though and is heavily criticized by many economics. A state is not a company and shouldn't be run like that. Arguably, encoding this system of measurement into the EUs policies was a big coup for the right because it's a good way to motivate the dismantling of a social system.The thing is: We've by now reached a world were retirement could, in theory, be even earlier. We've doubled the work force when we allowed women to work. We've created so many means to be more efficient. But there's a drive for companies to make money while lobbying for policies that keep the GDP low – because this then implies pressure on politics to enact state subsidies and lower taxes.But lower taxes is exactly what's fueling this situation. Which is why many leading economics subscribe to Modern Money Theory or adjacent concepts, seeing tax not an income but a deflation instrument (spoken very broadly) and spending as an inflation instrument. Government spending may be liberal, but will increase inflation (by printing money) and taxation can reduce deflation (by de-circulating money). Of course, taxes need to be raised not only on the workers/income but also on wealth... but alas
       
 (DIR) Post #B6aw7gCrJjrTAJtJVw by iamada@tech.lgbt
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       A lot of media (particularly American) have a rather skewed representation of the situation, blaming workers & social security as a concept, while reality points to systematic weaknesses of a “pay as you go” pension system.This combined with some of the lowest retirement ages available, inefficient expenditure, major demographic shifts (i.e. more dependents per worker) and less economic growth (etc) all play a factor as well.Hindsight has a fascinating dive into the situation:https://www.youtube.com/watch?v=HEdlWnj0omw
       
 (DIR) Post #B6awGlpzkYgvEjX1BA by iamada@tech.lgbt
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       @ljrk Debt:GDP is one indicator that is a part of a wider and more complex picture. Unsure if that is unclear, or whether this is a red herring :neocat_laugh_sweat:
       
 (DIR) Post #B6awGm6ekc1E4PKK9I by iamada@tech.lgbt
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       @ljrk fundamentally the core economic problem is simple: if your debt grows faster than your income, you will eventually get problems.To address this a government have to make more money through increased taxation and/or reduce expenditure through cuts, usually to the largest spending posts i.e. social security, healthcare and education.Social security, healthcare & education cannot be sustainably paid for when it is actively subsidized through increasing levels of debt, which is kinda what the thread and video highlights that France have been doing since the 1970s :neocat_thumbsup:
       
 (DIR) Post #B6awGmK7wWnIkBd596 by ljrk@todon.eu
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       @iamada This "core problem" is not supported by evidence, however, when it comes to state actors.Because it's been proven, over and over, that states reducing expenditure as a means to combat deficit is worsening the situation every damn time. Because it's not spending, it's more akin to investment – but also not really. It's putting money into circulation. Removing that has only the effect of crashing the economy further.Describing the situation as this problem is the core flaw of the last decades of economics because it pretends we have different ways of solving the issue – while we have not.