Public debt: “It is possible to increase revenue by about 87 billion euros”

dShould we embrace the alarmist discourse around debt? This is the fear of the moment. Global warming can be tolerated, the fight against unemployment and insecurity is no longer a priority. What we should fear more than anything else is debt. of the state, which, due to our inconsistency, burdens the fragile shoulders of future generations.

This topic should be the campaign theme for the European elections in June, as it is about political choices. Social democracy, concerned with preserving the welfare state, lost the ideological battle and liberalism won the victory, dismantling the welfare state and privatizing a number of public services.

With French public debt at €3,101.2 billion in 2023, or 110.6% of gross domestic product (GDP), and a public deficit at 5.5%, or €154 billion (“Information rapid” No. 74, Insee, March 26, 2024), the government maintains its goal of reducing This deficit to 3% in 2027, in 2024 and 2025 already with 10 and 20 billion budget cuts proposed. He does not plan to act according to recipes.

However, the expansion of the deficit since 2008 can be explained by measures aimed at reducing state revenues (waiving taxes on capital gains from the sale of companies, reducing their tax rate and ISF, etc.). The French paradox is that despite these targeted tax cuts, which were emphasized during the Macron governments, the rate of compulsory deductions (effective taxes and social contributions received by public administrations) has remained high. It declined very slightly in 2023 to 43.5% of GDP, compared to 45.2% in 2022.

New costs have been announced

But, in fact, the distribution of tax effort among economic agents is changed. Since 2010, according to the Observatory of French Economic Conditions, compulsory taxes on households have increased (from 25% to 28% of GDP in 2023), while taxes on businesses have increased from 17% to 16% (“OFCE Policy Brief” No 112, February 22, 2023).

During the Macron era from 2017 to 2023, average annual revenue growth was 2.8%, while spending grew by 3.7%, moderate in an inflationary context. It also includes special funds, estimated at 241 billion euros between 2020 and 2023, for emergency measures related to the health crisis and the subsequent energy crisis.