France's situation - is it perhaps a warning sign?

It should be understood by now, the sorts of topics about the economy which is frequently discussed, franchement, everywhere. I already talked about fiscal policies in a previous post (Fiscal policies). Getting the balance correct for a sustainable budget is exactly the problem to solve. There is no easy fix, there is no one size fits all and even in the same economy, requirements change over time as environments change.

Therefore it shouldn't be a surprise when France is being covered again, for the situation the nation is going through economically and thus politically. France has been a case for discussion because they obviously believe a lot in tax and redistribution, with the reputation of having the highest taxes amongst the G7 nations. They have been known for their high corporate taxes for decades, and of course they are viewed as quite a left leaning country. France is in the opposite side of the United States in many ways. Interestingly, despite being so left leaning, they have held a fairly positive reputation in Europe, despite the constant scrutiny it receives about this taxes and government programmes, until recently. The globe did also face a pandemic recently, which threw a wrench in the global economy.

Their attempt at increasing the retirement age in 2023 did not go well, with protests etc. With a fiscal policy system like France's, which is basically where the current tax payers are funding the recipients of government programmes, a policy change to increase the retirement age isn't a good sign about finances or the strength of the economy. Especially given the French way of life, it is unsurprising the policy change idea created widespread upset. However, it should be known that the government only has a limited number of tools to use to fix a fiscal issue, similar to how a central bank only has a few options to use monetary policy for economic activity.

I guess France is the current case to be a caution in the wind for politicians in other countries, to think carefully about fiscal policies and their effects in the long-run. It is particularly so, if economies can be consistently hit with e.g. various disease problems, which can have an overall contractionary effect on the economy. Bonne chance a la France!