Thread

1. petcat · 1790821195 · focus · HN ↗

   You want to see what's really bad, a train wreck in slow motion, just look at what France is doing.

   They've been subject to EU Excessive Deficit Procedures for multiple years, must bring deficit-to-GDP ratio from ~5.8% down to 3% within 3 years despite virtually no GDP growth and complete political and societal paralysis about reducing any public benefit or welfare whatsoever.

   ECB will most likely get involved after 2029 to start austerity measures. You can predict how that will go over with the French public especially if Le Pen takes the presidency, which looks likely.

   Very tough times ahead and the EU is facing a critical point about its future.

   1. clickety_clack · 1790821506 · focus · HN ↗

      If France or Germany are involved, it’s doubtful the ECB would be able to impose austerity.

      1. spwa4 · 1790860727 · focus · HN ↗

         Finally someone who points it out. Thanks!

         People are really invested into thinking the EU plays fair, that EU member states are equal, when that is very much not the case.

   2. zmmmmm · 1790821670 · focus · HN ↗

      Everyone thinks they can grow their way out of deficits, but it's always a pipe dream. It results in a growth obsessed economic plan that then causes all kinds of other stresses (such as being petrified of cutting immigration, for example). So much of this is all happening in lieu of politicians just being willing to have honest conversations with voters and take a risk of blowback. But I think people are over it and will value authenticity these days enough that it's a false economy. Just tell people the truth.

      1. Gigachad · 1790822043 · focus · HN ↗

         We live in a sick society where billionaires can buy fleets of mega yachts and space ships but governments can't afford to keep functioning.

         We have spent decades selling these billionaires government debt instead of just taxing them correctly.

         1. wallst07 · 1790850132 · focus · HN ↗

            Can you show me your math on how taxing Billionaires solves France's Debt/GDP issue? Or even the US's debt servicing. I'd like to see the analysis.

            This is not a argument on if they should pay more tax or not, it is a argument about what affect it has relative to the discussion of a countries debt.

            1. paulryanrogers · 1790855775 · focus · HN ↗

               One proposal doesn't have to fully address every facet of a problem. Managing debt involves both stopping the bleeding and mending the (many) wounds.
         2. slashdev · 1790874198 · focus · HN ↗

            You’ve misdiagnosed the problem. Taxing billionaires more is worthwhile, but it’s not causing the deficits and won’t fix them.

            1. bryanlarsen · 1790884456 · focus · HN ↗

               There are two major tax loopholes. Fixing them both would fix the deficit.

               - billionaires. This isn't an easy fix, it would require a wealth tax or similar.

               - the rest of the 1%. They are collectively far more wealthy than the billionaires, and the fix is actually quite simple: close the corporate pass-through tax loophole. Most of them are wealthy "small" business owners. The fix is simple, but difficult politically. There are a lot of people taking advantage of this loop hole, and they're quite influential and connected and.

               1. slashdev · 1790984958 · focus · HN ↗

                  Those things may be worthwhile, I’m not smart enough to know. But you can’t fix the deficit without also cutting entitlements.

                  1. bryanlarsen · 1790995585 · focus · HN ↗

                     It is possible to fix the deficit solely by raising taxes.
      2. applfanboysbgon · 1790822174 · focus · HN ↗

         > But I think people are over it and will value authenticity these days enough that it's a false economy. Just tell people the truth.

         We have seen abundantly clearly that telling the truth is the worst thing you can do for your political career. The correct move is to lie, lie, lie, lie. Reality is completely irrelevant. All you need to do is tell them what they want to hear. Nothing else matters. They will not hold it against you if you break every promise you make. They'll vote for you again and in greater numbers if you ramp up the promises to even bigger lies, nevermind your track record.

         1. cindyllm · 1790822265 · focus · HN ↗

            [dead]

         2. zmmmmm · 1790822433 · focus · HN ↗

            It's true but I think it's symptom of the same problem - people feel they are constantly lied to so they throw up their hands and go with the nicest lie that appeals to their base instincts. They don't get an alternative of truth vs lie - they get "lie that agrees with my instincts" vs "lie that doesn't" and hence we get overwhelmingly populist politicians winning who have no real plan of competence to solve the problems or implement the promises they were elected on.
         3. KerrAvon · 1790822462 · focus · HN ↗

            most politicians cannot do this, to be clear.

            trump can do this. it is very rare. you try to do what trump did and you'd be sent to jail instantly.

            1. JumpCrisscross · 1790823314 · focus · HN ↗

               > most politicians cannot do this, to be clear

               Most voters cannot handle it.

            2. hattmall · 1790823821 · focus · HN ↗

               Sure, Trump lies, but it's not unique at all. Biden was going to cancel student debt, Obama was going to close guantanamo, end the Iraq War and have single payer healthcare, GWB's "Mission Accomplished"... etc. So Trump's general dishonesty about what he's capable of as President is par for the course.

               1. zmmmmm · 1790839489 · focus · HN ↗

                  Just because others broke promises it doesn't put them into the same class as Trump. He is a true "outliar" on this front.
               2. adjejmxbdjdn · 1790847973 · focus · HN ↗

                  Biden canceled student debt. A politically oppositional Supreme Court invented new powers to undo his move while allowing Trump far more.

                  Obama attempted to close Guantanamo. The political backlash was massive. He essentially ended the Iraq war leaving only a skeleton crew to work with the government.

                  Those are not even in the same universe as all the lies and corruption Trump has peddled.

                  Heck, Trump has had a dozen Mission Accomplished moments in the Iran war alone, compared to the 1 stupid photo op by Bush.

                  If anything, equating very different situations with Trump’s regular lies and corruption like this is why Americans are confused.

                  1. AnimalMuppet · 1790859299 · focus · HN ↗

                     The Supreme Court did not "invent new powers" to block (much of) Biden's student debt cancellation. Biden did not have the constitutional authority to do that in the way he tried to do it. Simple as.

                     As for Trump... he's attempting, like, 20 times the constitutional overreaches that previous presidents did. He's winning on some of them; on many he's losing. I wish he was losing on more of them.

               3. paulryanrogers · 1790855629 · focus · HN ↗

                  Biden and Obama genuinely tried to do those things? How is that a lie?
      3. altcognito · 1790822277 · focus · HN ↗

         It can be done, the US did it for decades, but the budget can't be reckless. You can't ignore the top line forever. I accidentally put spending first in this post, and that was a mistake. The US has cut taxes, cut taxes and while it is true that we've done little to curtail wasteful spending, we've not actually addressed the wasteful part, we've just moralized about "who deserves what"

         1. idiocrat · 1790822761 · focus · HN ↗

            Very soon we all be multi-quadrillionairs.
      4. dhfirkf · 1790822411 · focus · HN ↗

         If your deficit funds corporate welfare or war rather than state asset building (infrastructure) that has positive ROI through externalities ofc it’s a mess. But that’s not all deficits
      5. mhh__ · 1790822515 · focus · HN ↗

         You absolutely can grow your way out of a deficit - France is maybe the most regulated liberal economy in the world? It's designed not to grow

         If you can keep energy costs down and get out of the way there will be growth. It's a thing that happens when people do business and make new things.

         1. Incipient · 1790823500 · focus · HN ↗

            There is growing without regard to the lower 95% (china, India, USA) which is great on paper, but arguably not great for the population. I'd say the EU, Australia, and a few other countries have done it significantly better - it's just a significantly harder approach to balance.

            Edit: and probably not as effective, which risks being overtaken by others, I suppose.

            1. tokioyoyo · 1790825917 · focus · HN ↗

               I hate to be a China apologist, but I’m not sure why you included them in that list. Bottom 95% is living in conditions unimaginable to a generation ago. Of course they have humongous problems, but in general, they have lifted everyone up by ignoring views of the rest.
            2. mhh__ · 1790850286 · focus · HN ↗

               The amount of growth the "95%" have seen in china is huge!

               Also American peasants / lower tier white collar workers are usually richer than fairly well off Europeans... You cannot even begin to comprehend how much wealthier the US is in some ways - and remember how totally dysfunctional the US economy is in many limits i.e. if Europe could just be as _bad_ as the US it would grow much faster.

               1. bryanlarsen · 1790858033 · focus · HN ↗

                  A poor American might be richer on paper than a European, but on surveys the poor American feels worse off. And they're not wrong: free medical care, the social safety net and less inequality are massive benefits that don't show up on the balance sheet.

                  1. sharts · 1790861688 · focus · HN ↗

                     fax. this always gets left out of discussions.

                     1. mhh__ · 1790883378 · focus · HN ↗

                        Yes apart from showing up in almost literally every "umm , we don't do THAT in Germany" back and forth on this very question
   3. JumpCrisscross · 1790823272 · focus · HN ↗

      > must bring deficit-to-GDP ratio from ~5.8% down to 3% within 3 years

      Or what? (Seriously.)

      Greece was forced to the table because the market wouldn’t lend to it. So long as France has lenders, why does this rule matter?

      1. viraptor · 1790836799 · focus · HN ↗

         They can lose some monetary discretion if it goes on for too long. I'm not sure what "corrective net expenditure path" means in practice, but it sounds like other members get to decide that one at the time.

         1. clickety_clack · 1790838001 · focus · HN ↗

            The ECB doesn’t have the political power to force France to give up any monetary control. The EU might govern France, but France (and Germany) govern the EU.

            1. petcat · 1790852361 · focus · HN ↗

               That's why I said that it is a coming crisis of confidence for the EU.

               France has snowballing debt with virtually no prospects of growing out of it by itself. So what is going to happen? It's a very dangerous situation that is only feeding the euroskeptics even more.

               1. iamnothere · 1790865450 · focus · HN ↗

                  It appears that the intended solution is EU militarization, in which French and German defense companies will take the lead.
      2. disgruntledphd2 · 1790866345 · focus · HN ↗

         > Greece was forced to the table because the market wouldn’t lend to it.

         Really, because the ECB wouldn't support it. Lots of EU economies (at the time) had great difficulties accessing the markets.

         1. JumpCrisscross · 1790875636 · focus · HN ↗

            > because the ECB wouldn't support it

            Why is this relevant? Athens was bailed out by other European countries and by the IMF. That’s why it had no leverage. France is not in a similar position, partly because its population is also a huge investor itself.

            1. disgruntledphd2 · 1790943008 · focus · HN ↗

               > Why is this relevant?

               Because it demonstrates that this is a political process, not a technocratic one.

   4. bigbaguette · 1790823770 · focus · HN ↗

      While the far right in France has been gaining traction with full throttle populism on fertile grounds, I wouldn't overestimate their chances to make it to the presidency and discount the fierce opposition that will be expressed the day people cast their vote.

      It is still a weak (but loud) political movement which lacks backbone and network.

   5. Balinares · 1790838470 · focus · HN ↗

      The Macron government went out of its way to cut taxes for the wealthiest percentiles. Debt exploded, costs were cut, infrastructure went unmaintained (which only ended up adding to structural costs), but the GDP growth remained anemic.

      However the wealth of the wealthiest increased substantially, so there's that, I guess.

   6. dv_dt · 1790845099 · focus · HN ↗

      I think austerity measures are counterproductive. After seeing how they worked (or rather didn't work) when imposed on multiple nations by the world bank, and self imposed in the UK and Germany, I don't think austerity works at this state of inequality.

      Perhaps short periods of austerity work in decades past when enough of the foundation was still established for public goods, but a this point of neoliberal economics, austerity just causes economies to slow or shrink

      1. adjejmxbdjdn · 1790848194 · focus · HN ↗

         Austerity can work in short doses and is intended for that.

         However, most western institutions and governments have used periods which required austerity to bake in long term privatization and government service cuts for ideological reasons, as opposed to treating it as a chapter 11 bankruptcy, for example, where they use it to clean and streamline their operations and programs and restart the services on a better footing.

      2. HDThoreaun · 1790890056 · focus · HN ↗

         The point of austerity isnt really that it works. The point is that its possible for an external actor to force a country into austerity. Its a last resort that is used when the domestic government is unable to or refuses to come up with a workable budget.

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