Below, we present an article written by an economist who does not take a
radical stance on the state, as this article provides interesting
information and allows us, even from a reformist perspective, to
understand that capitalism is a class struggle. ---- Every year at this
time, the public debate crystallizes around questions of the state
budget. This is an opportunity for the capital camp to reaffirm its
determination to crush the labor camp.
Thus, from François Fillon at the "head of a bankrupt state" to Emmanuel
Macron, who is worried about the inequalities passed on to future
generations, and including the short-lived Prime Minister François
Bayrou, who urged us to find "40 billion"-inevitably through social
cuts-autumn reminds us that the class struggle is not dead.
It is therefore a well-oiled machine: with public debt relentlessly
increasing, the working class is forced to accept "efforts" commensurate
with the situation. The rhetoric is sometimes alarmist, sometimes
anxiety-inducing, but always aggressive towards social gains, which are
seen as evidence of France's propensity to live "beyond its means."
Certainly, the public debt figures brandished by the capitalist camp are
enough to frighten the uninitiated. In 2024, the public debt of all
French public administrations amounted to EUR3,228.4 billion and
represented 112% of GDP. But a close examination of the mechanisms of
French public debt allows us to easily counter the neoliberal offensive.
Indeed, two conclusions emerge from this analysis. Public debt is the
result of neoliberal policies. Above all, it constitutes an engine of
financialized capitalism. Furthermore, crystallizing fears around the
issue of public debt allows the capitalist camp to justify its policies
of destruction and subjugation of workers.
Debt: A Necessity of Capitalism
Capitalism needs public debt. The increase in public debt since the
2000s is explained by three phenomena. First, economic crises:
capitalism, being a factor of instability, regularly gives rise to
economic or financial crises that weigh on public finances. These crises
always provide the state with an opportunity to bail out (without any
compensation) the capitalist camp through massive public spending that
increases the public debt. Second, part of the current debt results from
the pressure exerted by financial markets on our borrowing conditions.
Since states have decided to finance themselves through financial
markets, a "snowball effect" results: financial markets impose interest
rates higher than the states' repayment capacity. Finally, the policy of
reducing taxes for the wealthiest individuals and largest corporations
is also generating an increasingly heavy public debt.
If we do the math, in 2012, 59% of the public debt was a consequence of
these three factors. In other words, the public debt, which represented
91% of GDP in 2012, would have stood at 43% without the crises, the
snowball effect, or fiscal policy.
And Emmanuel Macron's policies are pushing this logic to its extreme.
The "whatever it takes" approach has increased the debt by EUR353
billion. According to the OFCE (French Economic Observatory), 48% of
this increase stems from political (and fiscal) decisions unrelated to
the crisis. Worse still, President Macron's tax policy since 2017 has
led to an increase in public debt of between EUR110 and EUR170 billion,
and has deprived the state budget of nearly EUR64 billion per year in
tax breaks.
Debt: A Necessity for the Transition? The working class is thus faced
with a dilemma. Public debt is necessary to achieve the ecological and
social transition, but this transition must be beneficial. The current
debt is "bad debt" because it is the result of a failing economic system
and tax measures that only serve to increase inequality and crush
workers. How then can we envision "good" debt? First, let's consider the
facts. The objective of a climate-neutral economy would require a
budgetary effort of between EUR25 and EUR34 billion per year and an
annual investment surplus of EUR70 billion. This can only be achieved
through additional borrowing. Several avenues are conceivable and
desirable for this purpose.
Firstly, it is necessary to restore a fair and progressive tax system.
The state spends lavishly to support private enterprise: public aid to
businesses (the largest ones, of course) amounts to nearly EUR210
billion per year, without any conditions attached and with no economic
benefit whatsoever. Tax loopholes, which cost the state over EUR90
billion in revenue each year, are also among the wasteful expenditures.
According to the Court of Auditors, 37% of these loopholes are
"inefficient" and 29% "inefficient." On the revenue side, there is also
enough to finance this shift if we are willing to commit the necessary
resources. As we have said, President Macron's tax policy costs us
nearly EUR64 billion in lost tax revenue each year, in addition to tax
evasion (estimated at between EUR80 and EUR112 billion per year).
Secondly, it is essential to seriously reduce our reliance on financial
markets for financing our public debt. As a reminder, it was a political
decision, made around the turn of the 1960s and 70s, that forced the
state to finance itself through the financial markets. Capital thus
replaced state-mandated financing with loans whose terms are dictated by
the financial markets and rating agencies. Regaining democratic control
over our financing is essential. Not only will the ecological and social
transition not occur if markets remain free, but, more importantly, the
system has already placed far too much of a burden on labor, which must
no longer accept the additional sacrifices demanded of it. The class
struggle has a bright future ahead; it is up to us to (re)conquer our
future.
Joan Agliyer, economist
http://oclibertaire.lautre.net/spip.php?article4569
_________________________________________
A - I N F O S N E W S S E R V I C E
By, For, and About Anarchists
Send news reports to A-infos-en mailing list
A-infos-en@ainfos.ca
radical stance on the state, as this article provides interesting
information and allows us, even from a reformist perspective, to
understand that capitalism is a class struggle. ---- Every year at this
time, the public debate crystallizes around questions of the state
budget. This is an opportunity for the capital camp to reaffirm its
determination to crush the labor camp.
Thus, from François Fillon at the "head of a bankrupt state" to Emmanuel
Macron, who is worried about the inequalities passed on to future
generations, and including the short-lived Prime Minister François
Bayrou, who urged us to find "40 billion"-inevitably through social
cuts-autumn reminds us that the class struggle is not dead.
It is therefore a well-oiled machine: with public debt relentlessly
increasing, the working class is forced to accept "efforts" commensurate
with the situation. The rhetoric is sometimes alarmist, sometimes
anxiety-inducing, but always aggressive towards social gains, which are
seen as evidence of France's propensity to live "beyond its means."
Certainly, the public debt figures brandished by the capitalist camp are
enough to frighten the uninitiated. In 2024, the public debt of all
French public administrations amounted to EUR3,228.4 billion and
represented 112% of GDP. But a close examination of the mechanisms of
French public debt allows us to easily counter the neoliberal offensive.
Indeed, two conclusions emerge from this analysis. Public debt is the
result of neoliberal policies. Above all, it constitutes an engine of
financialized capitalism. Furthermore, crystallizing fears around the
issue of public debt allows the capitalist camp to justify its policies
of destruction and subjugation of workers.
Debt: A Necessity of Capitalism
Capitalism needs public debt. The increase in public debt since the
2000s is explained by three phenomena. First, economic crises:
capitalism, being a factor of instability, regularly gives rise to
economic or financial crises that weigh on public finances. These crises
always provide the state with an opportunity to bail out (without any
compensation) the capitalist camp through massive public spending that
increases the public debt. Second, part of the current debt results from
the pressure exerted by financial markets on our borrowing conditions.
Since states have decided to finance themselves through financial
markets, a "snowball effect" results: financial markets impose interest
rates higher than the states' repayment capacity. Finally, the policy of
reducing taxes for the wealthiest individuals and largest corporations
is also generating an increasingly heavy public debt.
If we do the math, in 2012, 59% of the public debt was a consequence of
these three factors. In other words, the public debt, which represented
91% of GDP in 2012, would have stood at 43% without the crises, the
snowball effect, or fiscal policy.
And Emmanuel Macron's policies are pushing this logic to its extreme.
The "whatever it takes" approach has increased the debt by EUR353
billion. According to the OFCE (French Economic Observatory), 48% of
this increase stems from political (and fiscal) decisions unrelated to
the crisis. Worse still, President Macron's tax policy since 2017 has
led to an increase in public debt of between EUR110 and EUR170 billion,
and has deprived the state budget of nearly EUR64 billion per year in
tax breaks.
Debt: A Necessity for the Transition? The working class is thus faced
with a dilemma. Public debt is necessary to achieve the ecological and
social transition, but this transition must be beneficial. The current
debt is "bad debt" because it is the result of a failing economic system
and tax measures that only serve to increase inequality and crush
workers. How then can we envision "good" debt? First, let's consider the
facts. The objective of a climate-neutral economy would require a
budgetary effort of between EUR25 and EUR34 billion per year and an
annual investment surplus of EUR70 billion. This can only be achieved
through additional borrowing. Several avenues are conceivable and
desirable for this purpose.
Firstly, it is necessary to restore a fair and progressive tax system.
The state spends lavishly to support private enterprise: public aid to
businesses (the largest ones, of course) amounts to nearly EUR210
billion per year, without any conditions attached and with no economic
benefit whatsoever. Tax loopholes, which cost the state over EUR90
billion in revenue each year, are also among the wasteful expenditures.
According to the Court of Auditors, 37% of these loopholes are
"inefficient" and 29% "inefficient." On the revenue side, there is also
enough to finance this shift if we are willing to commit the necessary
resources. As we have said, President Macron's tax policy costs us
nearly EUR64 billion in lost tax revenue each year, in addition to tax
evasion (estimated at between EUR80 and EUR112 billion per year).
Secondly, it is essential to seriously reduce our reliance on financial
markets for financing our public debt. As a reminder, it was a political
decision, made around the turn of the 1960s and 70s, that forced the
state to finance itself through the financial markets. Capital thus
replaced state-mandated financing with loans whose terms are dictated by
the financial markets and rating agencies. Regaining democratic control
over our financing is essential. Not only will the ecological and social
transition not occur if markets remain free, but, more importantly, the
system has already placed far too much of a burden on labor, which must
no longer accept the additional sacrifices demanded of it. The class
struggle has a bright future ahead; it is up to us to (re)conquer our
future.
Joan Agliyer, economist
http://oclibertaire.lautre.net/spip.php?article4569
_________________________________________
A - I N F O S N E W S S E R V I C E
By, For, and About Anarchists
Send news reports to A-infos-en mailing list
A-infos-en@ainfos.ca
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