France’s President Macron overrides parliament to pass retirement age bill(cnbc.com)
cnbc.com
France’s President Macron overrides parliament to pass retirement age bill
https://www.cnbc.com/2023/03/16/frances-macron-overrides-parliament-to-pass-pension-reform-bill.html
29 comments
I do not know from which country you are from and what you are saying is probably true in your context but this is counterfactual for the situation in France. As I said in another comment, this reform, according to the french government, is not about saving the pension system, which has already been reformed and works pretty well, it's about reducing corporate tax [0].
[0] https://www.budget.gouv.fr/files/uploads/extract/2022/progra...
extract: La capacité productive de l’économie serait soutenue par les réformes et les investissements du Gouvernement, qui contribueraient notamment à accroître l’offre de travail et à atteindre le plein emploi: réforme des retraites [...].
[0] https://www.budget.gouv.fr/files/uploads/extract/2022/progra...
extract: La capacité productive de l’économie serait soutenue par les réformes et les investissements du Gouvernement, qui contribueraient notamment à accroître l’offre de travail et à atteindre le plein emploi: réforme des retraites [...].
> pension system, which has already been reformed and works pretty well
* Currently there is only 1.7 active contributors per retiree!
* There are 5% more retirees each year these days (700,000 new retirees each year). Double the newborn number each year.
* 331 billion euros of pension system expenditure in 2019. 3 times the number paid in the 1980'. More than what the French state gets from taxes.
https://travail-emploi.gouv.fr/retraite/le-systeme-de-retrai...
* Currently there is only 1.7 active contributors per retiree!
* There are 5% more retirees each year these days (700,000 new retirees each year). Double the newborn number each year.
* 331 billion euros of pension system expenditure in 2019. 3 times the number paid in the 1980'. More than what the French state gets from taxes.
https://travail-emploi.gouv.fr/retraite/le-systeme-de-retrai...
> * Currently there is only 1.7 active contributors per retiree!
Productivity has been raising continuously for the past 60 years in France. They are producing more wealth than they ever have. The number of people does not matter it's what we are able to produce which matters. I would be way more worried about the climate than the number of people in bullshit jobs.
As for retirees themselves, a way bigger problem is the amount of wealth they hold versus active contributors thanks to the insane housing market. This is the real problem and what they should address.
> * There are 5% more retirees each year these days (700,000 new retirees each year). Double the newborn number each year.
You are probably aware that newborns have a way longer life expectancy than retirees.
> * 331 billion euros of pension system expenditure in 2019. 3 times the number paid in the 1980'.
Seems irrelevant without controlling all the variables that changed in 40+ years...
> More than what the French state gets from taxes.
That's because several generations of government in France have been choking the state revenue with a lot of tax breaks (capital tax, cuts on cotisations, ISF, etc) and so called "niches". And before you jump and give me the "but France has the highest taxation rate!!!!", please refer to me previous comment [0].
[0] https://news.ycombinator.com/item?id=35186458
Productivity has been raising continuously for the past 60 years in France. They are producing more wealth than they ever have. The number of people does not matter it's what we are able to produce which matters. I would be way more worried about the climate than the number of people in bullshit jobs.
As for retirees themselves, a way bigger problem is the amount of wealth they hold versus active contributors thanks to the insane housing market. This is the real problem and what they should address.
> * There are 5% more retirees each year these days (700,000 new retirees each year). Double the newborn number each year.
You are probably aware that newborns have a way longer life expectancy than retirees.
> * 331 billion euros of pension system expenditure in 2019. 3 times the number paid in the 1980'.
Seems irrelevant without controlling all the variables that changed in 40+ years...
> More than what the French state gets from taxes.
That's because several generations of government in France have been choking the state revenue with a lot of tax breaks (capital tax, cuts on cotisations, ISF, etc) and so called "niches". And before you jump and give me the "but France has the highest taxation rate!!!!", please refer to me previous comment [0].
[0] https://news.ycombinator.com/item?id=35186458
If my parents-in-law didn't receive social security, it would be easier to convince them to sell their house and move interstate closer to us and provide babysitting services (which would encourage us to have more kids).
Unlimited welfare for the elderly is anti-natalist.
Unlimited welfare for the elderly is anti-natalist.
But we are also at an unprecedented amount of productivity. Surely the evolution from subsistence farming to Moon landings is exponential enough to account for many aspects of an aging society.
And don't forget, an unprecedented amount of wealth inequality. Maybe we could afford these programs if a certain subsection of the population actually paid into the system.
You cannot do that in the US right?
Correct. We have nothing like that. We also don't have the notion of a "motion of no confidence", which is the balance to it.
It basically forces the whole issue. They can overturn it by throwing the entire thing back to the people with a new election.
The US does have Executive Orders, which allow the President an unspecified amount of power. These can be used to work around a recalcitrant Congress. The limits of executive orders are poorly specified, and it's kind of tossed over to the Supreme Court to figure out.
It's pretty clear that an Executive Order raising the retirement age would be rejected, since it's clearly specified in legislation. But you can never really tell for sure.
It basically forces the whole issue. They can overturn it by throwing the entire thing back to the people with a new election.
The US does have Executive Orders, which allow the President an unspecified amount of power. These can be used to work around a recalcitrant Congress. The limits of executive orders are poorly specified, and it's kind of tossed over to the Supreme Court to figure out.
It's pretty clear that an Executive Order raising the retirement age would be rejected, since it's clearly specified in legislation. But you can never really tell for sure.
And I’m thankful it can’t be up to the executive branch (who ever is the president) to make such drastic decisions.
No. 49.3 is a provision of the French constitution that lets presidents pass a law without a vote of Parliament. But Parliament can, with a simple majority, vote no-confidence in the government, which annulls the law and forces all government ministers to resign.
The US analogy would be, if Biden could have told the Senate: "the only way you can stop Build Back Better, is by also forcing all my Cabinet-level officials to resign"
The US analogy would be, if Biden could have told the Senate: "the only way you can stop Build Back Better, is by also forcing all my Cabinet-level officials to resign"
Except that the President (at least in theory) cannot simply pass a law without Congress.
I can anticipate that this would be actively pushed for under many administrations... What stops such a vote from being called until the French presidency forms into a form that parliament likes?
The analogy breaks down quite quickly because the political/philosophical foundations are so different. One, the French President isn't removed via a vote of no confidence. Two, hopefully you would call votes of no-confidence until the gov't does reflect what the majority wants. That's the foundation of democracy... Three, this proviso was created specifically to overcome the delinquency brought on by multiple govt's in quick succession.
I don't think this is actually that unpopular with the MPs, they just don't want to be responsible for it. This has been in the cards forever with both right wing and PS governments claiming they'd tackle some part of it at least, but got intimidated by protests. Now Macron can finally do the unpopular law and they don't have to take any blame.
Macron has a very useful (or dangerous) arrogance compared to other French leaders, when he thinks he's right he won't be intimidated. It was almost comical seeing him in his suit going to gatherings full of random yellow vests "taking questions" just to explain to each of them why they're wrong on national TV night after night a few years ago. Also infuriating if you disagree with him
Macron has a very useful (or dangerous) arrogance compared to other French leaders, when he thinks he's right he won't be intimidated. It was almost comical seeing him in his suit going to gatherings full of random yellow vests "taking questions" just to explain to each of them why they're wrong on national TV night after night a few years ago. Also infuriating if you disagree with him
> Macron’s Renaissance party argues reform of the pension system is necessary to sustain it long into the future. It has a projected annual deficit of 10 billion euros ($10.73 billion) each year between 2022 and 2032, according to France’s Pensions Advisory Council.
> couldn't they have just.... funded it?
* Currently there is only 1.7 active contributors per retiree!
* There are 5% more retirees each year these days (700,000 new retirees each year). Double the newborn number each year.
* 331 billion euros of pension system expenditure in 2019. 3 times the number paid in the 1980'. More than what the French state gets from taxes.
https://travail-emploi.gouv.fr/retraite/le-systeme-de-retrai...
* Currently there is only 1.7 active contributors per retiree!
* There are 5% more retirees each year these days (700,000 new retirees each year). Double the newborn number each year.
* 331 billion euros of pension system expenditure in 2019. 3 times the number paid in the 1980'. More than what the French state gets from taxes.
https://travail-emploi.gouv.fr/retraite/le-systeme-de-retrai...
so, it costs more, but that doesn't answer the question why they couldn't find a way to fund it today (raise the budget etc), and why is the only choice to raise retirement....
They just turned years of expenditure into years of income. Those people who have to work for an income will have it taxed. So.... yes.
French taxes are already very high.
That's why the protestors wants to increase corporate taxes, not personal taxes.
Sooner than later, a growing population of older individuals who are living longer and no longer in the workforce becomes unsustainable for a country whose workforce primarily comprises younger individuals.
The system in France is perfectly stable as the government itself proved. Macron and his aides have publicly stated that this reform is not about "saving" the pension system which work actually pretty well. It's about reducing corporate taxes [0].
[0]: https://www.budget.gouv.fr/files/uploads/extract/2022/progra...
[0]: https://www.budget.gouv.fr/files/uploads/extract/2022/progra...
To what extent? They’re already pretty high and make France not competitive.
Taxes are high because the pension system is managed by the public sector and are financed by taxes. In a country when pension are a matter of personal responsibility, they are paid to private companies.
So you see, when a french person pay for their pension, it's taxes. When a person from another country pay for their pension to private companies, it's GDP. In the latter case, you have the additional freedom of not paying anything (especially if you don't make enough) and then hope that you die before retirement. I would not call this freedom though.
Try to think outside of the conventional wisdom which is completely skewed
So you see, when a french person pay for their pension, it's taxes. When a person from another country pay for their pension to private companies, it's GDP. In the latter case, you have the additional freedom of not paying anything (especially if you don't make enough) and then hope that you die before retirement. I would not call this freedom though.
Try to think outside of the conventional wisdom which is completely skewed
GDP is calculated using either income before taxes or total expenditure including government expenditures.
It is an interesting comment but misleading and irrelevant to the subject. When you pay for your pension (in a country like France) it is not included in the GDP because it is considered a tax.
When the government pay their pension to a pensioner it is not included in the GDP [0].
[0] https://www.investopedia.com/ask/answers/082415/are-social-s...
When the government pay their pension to a pensioner it is not included in the GDP [0].
[0] https://www.investopedia.com/ask/answers/082415/are-social-s...
There are two ways to calculate GDP, an income approach and an expenditure approach. In the expenditure approach, transfer payments are not listed as an expenditure. But when a retiree buys something with that money is counted.
Under the income approach, social security tax payments are included in income: https://staffwww.fullcoll.edu/fchan/macro/2gdp_computation.h...
You’re incorrect to say that an economy without social security artificially seems like it has a higher GDP than one with social security. It is counted as income to the employee, and anything purchased with it is counted as consumption.
Under the income approach, social security tax payments are included in income: https://staffwww.fullcoll.edu/fchan/macro/2gdp_computation.h...
You’re incorrect to say that an economy without social security artificially seems like it has a higher GDP than one with social security. It is counted as income to the employee, and anything purchased with it is counted as consumption.
Well.. we need the money to pay for the Olympics next year. Priorities, you know?
We could also rethink the value work. We're on the cusp of living in a post scarcity world - perhaps moreso in some countries than others. This reality may cancel out the other one.