France, Electoral Suicide, and the 22nd Theorem of Government

October 15, 2025 by Dan Mitchell @ International Liberty

 Back in 2011, I shared two cartoons to illustrate why the welfare state might theoretically collapse. Today, I’m going to examine what I fear will be a real-world example. I’ve written a four-part series about France’s dire fiscal status (see here, here, here, and here). Here’s a chart that helps to explain why that nation is in trouble. You get more money when retired than you earn while working!

No wonder France has a bloated public sector and a massive amount of government debt.  But people in France don’t seem to worry about the likelihood of a fiscal crisis. Indeed, they think they should be able to retire even earlier even though lifespans are increasing.

Sadly, politicians are responding to voter greed. Here are some excerpts from an AP report by Samuel Petrequin

 

French Prime Minister Sébastien Lecornu on Tuesday announced he would suspend a much-debated plan to raise the retirement age from 62 to 64… The Socialist Party, which is not part of the governing coalition, had demanded the law be repealed. Boris Vallaud, president of the Socialist group in the National Assembly, said his colleagues were ready to take a “gamble,” making clear they would not vote the no-confidence motions. 

Vallaud called the suspension a “first step” toward scrapping the law. …France’s deficit hit 5.8% of gross domestic product last year, way above the official EU target of 3%. France is also facing a massive debt crisis. At the end of the first quarter of 2025, France’s public debt stood at 3.346 trillion euros, or 114% of GDP. …Communist party leader Fabien Roussel called the suspension of the pension reform “a first victory.”

The communist leader may view a younger retirement age as “a first victory,” but I’m wondering whether “the final straw” might be more accurate.  Heck, I wonder whether it is a sign that France is fundamentally ungovernable.  The situation is so catastrophic that I’m motivated to add to my collection of Theorems.

Just in case you think I’m being overly pessimistic, let’s look at some passages from a new report in the U.K.-based Economist.

 

Since the foundation of the welfare state its critics have warned that it would be captured and abused by coalitions with political power. …The ageing of populations has utterly reshaped the composition of government spending. …since 1980 transfers to the elderly and spending on health care—which is overwhelmingly concentrated on them—have grown by about 5% of GDP in the OECD group of rich countries, twice the rise in other social spending.  Advanced economies in the G20 will, on their current trajectories, spend another 2.4% of GDP more annually on pensions and health care by 2030 than in 2023, according to the IMF. …ageing a fiscal problem… 

At their inception, public pensions in Britain and Germany offered meagre support to those over 70 when life expectancy was 45-50. But as life expectancy shot up, the age at which public pensions could be claimed did not keep pace. …Since then governments have made efforts to raise retirement ages in line with increases in longevity, but it is fiddling around the edges compared with the decades-long trend. …Proposals to make even minor changes to pension benefits have provoked furious protests in backlash. …As populations have aged, politics seems to have become more of a bidding war… The elderly have a lock on welfare states.

For those who want to dig into all the numbers, the study I co-authored last year for the Fraser Institute shows how various nations are dealing with government pensions.

You’ll see that France has the world’s second-highest fiscal burden for old-age income support, trailing only Italy (another nation that’s probably on the brink of fiscal crisis).

At the risk of understatement, this won’t end well. I fear the French are not sufficiently responsible to maintain a functioning democracy.

P.S. That aforementioned Fraser report explains that there are some nations that are in decent (or less-worse) long-run shape because voters elected governments that created private retirement accounts. Examples include Denmark, Sweden, Estonia, the Netherlands, Australia, Chile, Israel, and Switzerland. Sadly, the United States is not on this list.