Over a year ago, in the midst of an ongoing economic crisis, François Hollande celebrated his victory over Nicolas Sarkozy in France’s presidential elections. Hollande became the leader of a country in economic turmoil. In the past year, he has had relatively free rein to carry out his economic agenda, since the Socialist Party he leads has a majority in the French Parliament.
France has a
history of grandiose government spending, even among European countries. Public
spending accounts for 57 percent of national output, and public debt accounts
for over 90 percent of GDP. While austerity has been the buzz word in the rest
of Europe since 2009 resulting in a modest decline in government spending as a
percentage of GDP, France is not part of that trend.
The public sector
now accounts for almost two-thirds of all direct economic activity, and more if
indirect activity is counted. This large and growing dependence on government
is disastrous because it is funded by ever higher taxes. These high taxes drain
the private sector (while simultaneously giving the public sector an aura of
impotence) and deficit spending obliges future generations of French citizens
to pay off the largesse of today’s government……To Read More…..
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