“There is little sense in isolating the “social” a part of the general public deficit, as a result of that is artificially created by the State” | EUROtoday

HAStogether with his guide The social debt of France. 1974-2024 (ed. Odile Jacob, 544 pages, 28.90 euros) Nicolas Dufourcq, the boss of the Public Investment Bank (BPI), establishes within the public debate the concept based on which “out of the 3,500 billion euros [de dette publique] today, 2,000 billion (…) are social benefits paid for forty years on credit”. Until now, this estimate has been taken at face worth, with out contradiction, through the creator’s quite a few media interventions, together with in The World. Unfounded, it diverts our consideration from the actual causes of the financing drawback of the French social mannequin.

His work, nevertheless, has a double curiosity. For the historian, it presents a documented have a look at the half-century of political life that has handed, enriched with testimonies from actors. To the citizen, it poses a respectable query: what a part of the general public debt could be attributed to the rise in social spending not financed by obligatory contributions?

However, its methodology seems to be hazardous: public spending, because the Nineteen Eighties, has amounted to 38,000 billion euros; 58% (22,200 billion) are social expenditures; due to this fact 58% of the three,500 billion debt is a “benefit debt”. First mistake: each economist is aware of that social spending and complete public spending can’t be added collectively with out being adjusted for inflation. However, based on INSEE, 1 euro in 2024 has the identical buying energy as would have had… 0.31 euros in 1980!

Handling funds piping

Second error: robotically impute the 58% to the inventory of present public debt. Assimilating the share of social spending in public spending to the share of the supposed “social debt” in complete debt quantities to admitting that the identical proportion of social spending and of all public spending is financed on credit score. However, the vast majority of social expenditure has its personal income (social contributions, CSG, CRDS, VAT). Finally, social spending helps consumption and social cohesion, contributes to progress and generates a tax surplus which limits recourse to debt. We can not, due to this fact, estimate the losses with out subtracting the beneficial properties.

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