(first published: on atlantico, 27 November 2012, http://www.atlantico.fr/decryptage/dette-publique-40-ans-deni-psychologique-et-continue-alain-renaudin-558285.html - an article that unfortunately never gets old! unless you consider additional lines of debt as the wrinkles of an ageing and weakening State)
Since the presidency of Valéry Giscard d'Estaing, France's public debt has risen from 20% to 100% of GDP (96.3% at the end of Q1 2015, or 2089 billion euros).
In 2012, Europe welcomed an agreement on Greek debt, setting itself a target of 124% of debt to GDP by 2020 (!). Three years on, in the summer of 2015, there is no point in revisiting the abracadabratic soap opera of this chronic crisis, which is as much the crisis of Europe, its Member States and its political leaders. It's a sign of the times that Europe does not have a monopoly on this headlong rush, as most 'modern' states now seem condemned to managing their finances like Danaid barrels, desperately and eternally trying to fill them with new debts and new taxes. On the other side of the Atlantic, the United States is going through a series of (increasingly tough) rounds of negotiations between Democrats and Republicans to regularly authorise new debt ceilings, without raising what they call the "fiscal cliff". Today, the "legal" limit of $18,300 billion in US public debt has once again been exceeded. So, for the Western economic 'model', it is always useful for the state to go further into debt.
On our side we are in the same budgetary trap. Our own public debt (although no one feels it belongs to them) will therefore reach 100% of GDP in 2015This was followed by 82.3% in 2010, 79.2% in 2009, the year of the big jump with 11 points more than a year earlier (68.2% in 2008). It is then necessary to go back to 2002 to go under the 60% threshold (58.8%), you remember the Maastricht threshold. In the end, the agreement was only marginally applied, but it mainly provided (among other criteria) for staying below this rate of 60% of public debt in relation to GDP and 3% of annual public deficit. At the time, this equation was considered tenable. This was of course without taking into account the slowdown in growth and the deep crisis in which we are mired.
In retrospect, this crisis is a good thing, because growth, which we thought would compensate for - i.e. allow us to offset - this chronic public deficit, had been slowing for several decades. The growth rates were 1.4% for the 2000s; 1.9% for the 1990s; 2.3% for the 1980s; 4.1% in the 1970s and 5.9% in the 1960s. However, the surge at the end of the 1990s to around 3% of annual growth made us dream. But by 2001, we had fallen back to 1.8%, and 0.9% in 2002 and 2003, well before the subprime crisis and that terrible year of 2009 with -2.7% of growth.
Therefore, the absence of growth could no longer contain the rise in public debt, which nothing else could reduce: we bailed out more quickly than the ship sank. Public debt has thus soared from 60% to over 80% in a decade. But the problem goes beyond political changes and is much older than the recent period. In another decade, from 1981 to 1991, the debt had risen from 21% to 36%, and, even more dramatically, had jumped to 60% during the following decade, which nicely allowed itself an average annual deficit of 6% per year.
What has been striking over the last few years is the fact that we have reached absolute rates that we considered untenable not so long ago, and the chronic inability of governments to stem the haemorrhage ... despite long-standing claims that this is an evil to be fought. The most recent and striking example of this is of course François Fillon, who on 24 September 2007 declared " I am the head of a state that is financially bankrupt" He explained in passing that the State had been in this situation of chronic deficit for 15 years. In fact, it has been even longer, because the reference in terms of good budgetary management is Raymond Barre, who, as early as September 1976 (i.e. 30 years before François Fillon!), gave a simple explanation for the economic difficulties: " France is living beyond its means. Incomes grow faster than production. Credit is distributed too abundantly. State expenditure exceeds revenue and the budget deficit this year (76) will be 15 billion Francs, an improvement on last year's deficit (74) of 35 billion Francs "(in 2011, the budget deficit amounted to 90 billion euros). As a presidential candidate in 1988, our 'best economist in France' won 16.54% of the vote, in third place behind Jacques Chirac (20%) and François Mitterrand (34%).
For the past 40 years, there has been a kind of political and collective hyper-awareness of budgetary disease, accompanied by sluggish and irregular compliance with therapeutic treatment. The disease becomes chronic, we get used to living with it, and in the absence of acceptable (i.e. comfortable) solutions, we trivialise the issue, like the psychological denial of an illness we do not want to treat.
Since the presidency of Valéry Giscard d'Estaing, France's public debt has risen from 20% to 100% of GDP. At €50 billion a year in repayments, the cost of debt has become the second-largest government budget, behind the national education budget (€65 billion). There is no prospect in either the US or Europe that the states will be able to get out of this chronic debt.
On a deeper level, this period (so much the better if it becomes a "transition", but nothing is less certain) reveals the following structural changes:
- Political leaders seem to have reached their competence thresholdThey are incapable of coming up with new solutions to the ills of modern society;
- The proven inability of increasing public debt to curb unemployment and encourage growth (see graph below)
- A questioning of the usefulness of public spending (the question is more one of the usefulness of the public euro levied than that of the absolute levy rate).
- Politicians and the general public are no longer held responsible for the debts of their governments, which are considered to be virtually "virtual".
