February 24, 2007

IF THE PAST TWO CENTURIES ARE ANY INDICATOR, GOD WON'T:

God help France if it falls for the charms of Ms Royal: The man who did her calculations was so shocked he resigned (Chris Walker, 25 February 2007, Independent)

In 1979, the British were 20 per cent poorer than the French, as measured by GDP per head. We are now 5 per cent richer, and the outlook is for that gap to widen further. The general economic background is a major part of this - the French economy has crawled along at a growth rate that has averaged half that of the UK's in recent years. Unemployment is stubbornly high, and even after a recent recovery, remains nearly twice the UK's.

All this despite the extraordinary act of generational theft that is being committed daily by the French pension system, which is funding current consumption by inadequately providing for the future. Not to mention incredibly high government spending - 43 per cent of GDP, while national debt is now equivalent to 70 per cent.

Income tax and national insurance, too, are frighteningly high. The average rate for individuals is some 45.3 per cent, compared with 41 per cent across the EU. The top marginal rate was, until recently, nearly 70 per cent, leading to the classic brain drain that Britain suffered in the 1970s. Johnny Hallyday was a recent high-profile departure for Switzerland, and over 300,000 have chosen exile in the UK alone. The rate of exodus appears to be accelerating. This in itself leads to ever-lower tax take for the Treasury.

This is the situation after years of right-wing leadership that has clearly failed to tackle the ensuing crisis. Time for "France's Blair"?

Ségolène Royal's famous "100 Point Plan" seems more like "100 Ways to Make Things Worse".


Sarkozy is France's Blair.

Posted by Orrin Judd at February 24, 2007 9:03 PM
Comments

An interesting question is how large the gap in employment and per capita income will be once the English finally ditch the Scotch, leaving their northern neighbors to their French-like malaise.

Posted by: Jim in Chicago at February 24, 2007 9:31 PM

Not to mention incredibly high government spending - 43 per cent of GDP ...

Does anyone know America's percentage for this stat?

Posted by: HL at February 25, 2007 7:20 AM

We have a $3 trillion dollar budget and $14 trillion GDP.

Posted by: oj at February 25, 2007 9:32 AM
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