What is behind Macron’s problems (and what is the relationship between the US and China’s crises) – Corriere.it

that France is paralyzed of strikes against pension reform is perhaps not surprising. It’s not trivial to find out even in China They broke out Protests against cuts to pensioners’ care. Even less obvious is the discovery of it in United State – a country to which many Italians mistakenly ascribe entirely private luxury – the government should suggest Two Trillion Maxi Sting Within ten years to control the deficit social expenses.

Emmanuel Macron, Xi Jinping, and Joe Biden already have a gigantic problem: Welfare crisis At present it is getting worse along the entire east-west axis. the aging societies They meet on the same ground, namely, the growing financial imbalances of Social Security and Medicare. In Beijing as in Paris and Washington, the issue dominates the domestic agenda of governments, with impressive timing. We can divide and fight over everything else from Ukraine to Taiwan, however An aging demographic makes us all very similar.

there France And Textbook case To illustrate the difficulty that entire societies have in looking reality in the face. Macron is simply trying Raising the retirement age from 62 to 64 yearsIt is a necessary, modest and overdue measure. With the current life expectancy of the average French individual, retiring at 62 is for all intents and purposes an unsustainable children’s pension. Italy is already ahead of France From this point of view. But France has a deeply rooted state and welfare culture, as evidenced by the mass support for the protests these days against Macron’s project.

France suffers from a ancient economic illiteracywas the birthplace of “work less work for all”, a slogan that actually contradicts: Countries where older people work longer hours (Japan and the United States) They have much less youth unemployment Compared to children’s pension havens. The explanation is simple: national wealth is not a static cake divided between generations, it is a dynamic entity, The more people work (including the elderly) The more this work generates well-being This, in turn, creates other jobs. A poor vision of the distribution of scarcity was also the source of such a French disaster as the 36-hour week law, which reduced competitiveness thirty years ago and did not increase employment at all. However, the majority of the French, loyal followers of the state religion, continue to mobilize against the laws of economics. Macron is sticking around, and rightfully so. However, his battle is still uphill.

China, despite declaring itself socialist, has Mixed healthcare system, overlapping with the American and European side, where part of the treatment is paid for by the patient and then reimbursed by the state. with limits. Until recently, a 66-year-old pensioner received the equivalent of 30 euros a month from the state for medical expenses. Recently, that assistance has dwindled to a third. One result of the reform initiated by Xi is the reduction of the three main items of social spending: pensions, medical assistance and unemployment benefits. The huge public fund that manages social welfare has been in deficit since 2013, and its losses amount to 28% of the total budget: it is the difference between the volume of spending and the revenue generated by the contributions of companies and workers. The demonstrations of pensioners in the field against cuts are evidence of this Even in China, the welfare crisis is sparking social resistance.

L’America It is often considered a special case. Those who watch it from afar often stop at clichés, think healthcare and pensions special. Actually one A large portion of American welfare comes from the federal budget (And also, to a lesser extent, those of individual states). In healthcare, the two main pillars of the public system are: Medicare which administers assistance to those over 65, and Medicaid Which provides care for those below the poverty line. There are private funds in pensions but supplement Social Security, American INPSCorporation established by Franklin Roosevelt in 1934.

Medicare continues to see higher spending as a result of longevity, and also because it takes increasingly advanced and expensive treatments (even if it shifts costs in part to upper-middle-class patients through a system of mandatory contributions with real progressive taxes). Medicaid is seeing a spending boom for many reasons, including the high poverty line ($22,000 annual income for individuals and $44,000 for a family). In addition to Many Democratic-ruled US states take advantage of Medicaid to provide free treatment to immigrants, with or without a residence permit. Social Security should be balanced in theory because it’s based on the pure contribution principle: You accrue your pension based on the contributions you’ve paid. But even here, extending the average life plays into balancing the budget. Pensions and health care They are up to date The two main causes of public debt The American who has now reached his threshold 100% of the GDP. In comparison, military spending is insignificant, when compared with the so-called “entitlements”, that is, acquired social rights.

It is to stop the current rising deficit and debt that Biden has introduced Plan of cuts and new taxes worth 2000 billion over ten years. But there will be a battle over this in Congress, which has the final say on budget laws. Republicans, who hold a majority in the House of Representatives, will try to shift the balance toward spending cuts rather than tax hikes. America also offers a refutation of the notion that welfare imbalances can be remedied thanks to the contribution of immigration. The US model – based on positive migration flows – showed that immigrants consume more social services and aid than they contribute in taxes and payments. In particular, the mechanism for reunification of large families ensures this Immigration contributes to the deficit of social services. Especially in those countries that have democratic administrations, such as California and New York, which are particularly generous in granting subsidies to foreigners.

The red thread that unites all crises of Social Security and healthcare systems from West to East, from Washington to Beijing via Paris, tends to confirm that it will be. Confusion about extending the working age is inevitable everywhere that is, postponing the retirement age (in America and Japan it is already between 67 and 70 years old), In addition to reducing some benefits. Tax increases are the third component of the mix, with their drawbacks in countries like France where the pressure is already very high. China starts from lower taxes, but also from lower per capita income, and so will be reluctant to move aggressively on fiscal tightening. America has internal tax competition—with an exodus from high-tax states to low-tax states—and a new Republican majority determined to clamp down on federal tax appetites.