thethere is a debate on the reduction of public deficits in France, which should amount, in 2024, to more than 5% of the annual gross domestic product (GDP), or around 150 billion euros, systematically involve tax increases and/or spending reductions public spending.
Without abstaining from studying a more aggressive taxation on incomes considered speculative – for example super profits not at the service of investments -, or a reduction in social expenses considered unproductive – for example reimbursements of drugs with dubious therapeutic efficacy – it is indeed clear that the decisions in this area lead to a dead end.
On the one hand, in fact, France is already one of the developed countries with the highest mandatory taxes in the world (48% of GDP).Has this prevented the public deficit? Obviously not.
Conversely, reductions in social spending would have an immediate effect on consumption, and therefore on the mutilation of our already very weak growth, not to mention the populist reactions that thay would secrete and which prove to be a real democratic poison. A preferable way out of the impasse would be to ask political leaders to look more carefully at how GDP, from which public budgets derive most of their resources, is produced through taxes.
By definition, a country’s GDP is the sum of the added value created by its private companies and public organizations. However, research on creating added value in organizations, such as that of the multidisciplinary collective What do we certainly know about the work?demonstrate that companies and organizations in France suffer from massive losses in added value. This is due to a management of human potential and an organization of work that remains too Taylorian (division of labor, standardization, etc.), in the private sector, and too Weberian (hierarchy, rules, procedures, etc.), in the private sector. public sector.
How can France balance tax increases and public spending cuts to address its deficit effectively?
Interview: Addressing France’s Public Deficit Dilemma
Editor of Time.news: Thank you for joining us today. We’re delving into a meaningful issue for France: the impending public deficit set to surpass 5% of GDP in 2024.With us is economic expert Dr. Jean Dupont. dr. Dupont, could you summarize the core of the debate around this public deficit?
Dr. Jean Dupont: Certainly. the public deficit in France is projected to exceed 150 billion euros in 2024, leading to discussions about increasing taxes and/or reducing public spending. However, these approaches can be problematic. With France already imposing one of the highest tax rates in the world — around 48% of GDP — merely raising taxes might not yield the desired outcomes in deficit reduction.
Editor: That’s a critical point. You suggest that raising taxes isn’t the sole solution. What are some of the option strategies being discussed?
Dr.Dupont: A more nuanced approach might involve reforming how we tax income seen as speculative, like superprofits that aren’t directly supporting investment. Additionally, we should consider reallocating resources from social expenses deemed unproductive, such as reimbursements for drugs lacking therapeutic efficacy. However,it’s essential to acknowledge that significant cuts to social spending can adversely affect consumption,leading to weaker economic growth and potential public backlash.
Editor: So, the key is to strike a balance. Would you elaborate on how GDP is related to public budgets?
dr. dupont: Absolutely. The GDP is essentially the total added value produced by both private and public entities. Unfortunately,research shows that many companies in France are underperforming in terms of added value production.This inefficiency is attributed to outdated management practices — excessively rigid structures in both private and public sectors hinder innovation and value generation.
Editor: Given these inefficiencies, what practical recommendations do you have for business leaders and policymakers?
Dr. Dupont: Leaders should focus on revising organizational structures to empower employees and encourage innovation. Moving away from a strictly Taylorian approach in the private sector, and a Weberian structure in the public sector, is crucial. Embracing versatility, enhancing collaboration, and promoting creative problem-solving can significantly improve added value. Additionally, policymakers should prioritize understanding how economic activity translates into actual GDP growth, as a growing economy can pave the way for a healthier public budget.
Editor: It sounds like fostering a more dynamic work environment could play a pivotal role in addressing the deficit. What implications do you foresee if these changes are not implemented?
Dr. Dupont: If we fail to address these underlying issues, we risk being trapped in a cycle of high taxation with insufficient returns. The economy might continue to stagnate, leading to increased public dissatisfaction and potential democratic instability. This could create a fertile ground for populism and further complicate our governance structures.
Editor: Thank you, Dr. Dupont, for your insights on this pressing issue. It’s clear that a multifaceted approach to France’s public deficit, emphasizing improved management and value creation, is essential for enduring economic health.
Dr. Dupont: Thank you for having me. It’s vital for both business leaders and policymakers to recognize that innovation and flexibility are the keys to navigating these economic challenges effectively.