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> France passed through unconstitutional reforms without the votes As confirmed by higher courts, including the constitutional one, the reforms were constituti
by sofixa 3y ago
> France passed through unconstitutional reforms without the votes
As confirmed by higher courts, including the constitutional one, the reforms were constitutional and pushed through via a constitutional measure (49.3) that gives the government the (limited in number of attempts) power to force legislation, unless a motion of no confidence brings them down. The fact that the motions didn't get a majority means that the reforms had enough votes for them, but the members of parliament didn't want to be directly associated with having voted for them, which required the maneuver. The reforms are highly unpopular, controversial, imperfect, but in the end were needed. You could frame it as stealing from the people, I'd frame it as an imperfect attempt to ensure a long-term financial stability (France spends a lot on pensions, regularly runs deficits, and the projections were pretty terrible - optimistic scenarios for 2050 had 15% of the GDP going for pensions, for a median Quality of Life 75% of that of the median active worker. That's fundamentally unsustainable, and vague populist "we'll just tax X" won't fix it. We could have had a better reform, but I'll take a poor one over none at all).
- riku_iki 3y ago> I'd frame it as an imperfect attempt to ensure a long-term financial stability I somehow seriously doubt raising retirement age by 2 years (from 62 to 64, life expectancy is 82) will "ensure a long-term financial stability". There are usually many other way to optimize the system, but macron chose exactly to take from people.
- atoav 3y agoWhich number would you tweak to make a retirement fund financially balanced? I am not an expert, but of the top of my mind we have the following possibilities: [1] balance the bottom of the age pyramid: get more working people. Either by creating a social/financial situation that gives young people the security to get kids or by easing work migration from places with many young people. [2] balance the top end of the pyramid: make the health aystem worse so people die earlier and you don't have to pay pensions so long [3] raise the retirement age so the fewer payers raise more money and you have to pay out less over time. [4] change the way retirement funds are allowed to work with the money so they can work with the interest [5] If bureaucratic cost is an issue with the retirement system you can save some money here, but it is going to be peanuts in comparison to the other measures. [6] Raise the money from elsewhere (e.g. by taxing investment gains oe by raising wages and have a bigger fraction of the wage going to retirement funds) Option 1 either takes long (kids that will be born in a few years will not be able to work until decades later) or has cultural side effects (a significant amount of migration can lead to all kind of tensions with the local population). Option 2 is not an option on ethical grounds. Option 3 is the easy option, although it has the side effect that people who know they are never going to retire might not want to get kids so the problem gets worse without some measure to counter this. Option 4 is something scandinavian pension funds already do (investing the money for returns), although the risk has to be managed properly then. If you can't motivate people to get more kids (well paying secure jobs and a positive outlook on the future) the only number you can reasonably adjust in an aging society is the retirement age. People live longer so they have to work longer. As a fraction of the average livespan they work the same. If France raises the retirement age by two years to 64 they are still retiring earlier than all surrounding countries. Italy: 67, Spain: 66, Germany, Belgium: 65
- riku_iki 3y ago> [6] Raise the money from elsewhere (e.g. by taxing investment gains oe by raising wages and have a bigger fraction of the wage going to retirement funds) yeah, for example I googled and found that corp tax dropped from 33 to 25 in last five years, so they literally took money from employees and gave to employers. But trivial change could be to make pensions base on retirement age: someone can retire at 62, but get smaller pension, and another could retire at 78 but get much larger pension, plus have pension base on contribution.
- NoLinkToMe 3y ago> But trivial change could be to make pensions base on retirement age: someone can retire at 62, but get smaller pension, and another could retire at 78 but get much larger pension, plus have pension base on contribution. That trivial change is essentially already the case. There's no law that requires you to work like some kind of slave. You can retire whenever you want. The laws are about the age to be eligible for full-retirement. You can already retire early and receive a lower retirement, or keep working for much longer and have a much higher income in retirement. > corp tax dropped from 33 to 25 in last five years To drive economic growth. France's gdp per capita is lower today than it was 15 years ago. In the US it's 45% higher than it was 15 years ago. France's corporate system wasn't working, and high taxes were a key reason from lots of studies. Anyway, taxes aren't really that relevant for retirement. If a person needs to consume 10 units of goods/services (e.g. food, clothes, healthcare, whatever), and workers produce 40 units each, a population of 25 workers can produce 1000 units and sustain another 75 retirees (1000 production, 1000 consumption). If you lower the retirement age such that there are just 15 workers and 85 retirees, you're now still consuming 1000 units, but only produce 600 units. There's massive shortages, prices skyrocket, and many people become poor because there's not enough production to meet their needs. Raising lots of money through taxes doesn't change this fundamental issue. Even if you give everyone $ 1 trillion dollars of money, in this economic system, there's still not enough production to meet needs. So you need one of two things to solve it: more workers (= more production), or more productivity per worker (= more production). That latter point is not something the government can really control, although high taxes tend to drive productivity per worker down because economic activity is less rewarding to the source of the activity, as the activity is taxed. So high taxes can actually make this situation worse. I'm aware I'm simplifying a lot but I hope it helps to show taxes don't address the root-cause issue.
- ArnoVW 3y agoThe projected annual pension defecit was 30 billion in 15 years, then gradual reduction (as people die). This was the most optimistic scenario, based on x% growth and y% unemployment. Other scenarios were analysed. Btw, these analyses were performed by the Council for the Orientation of the Pensions, a bi-partisan entity. The other options you mention were : * more tax on people (france famously already has the highest in the OECD) * more tax on companies (which will just increase cost of work and thus drive jobs elsewhere) * run a defecit (debt is already scary high, and it means essentially making pay our kids for grandma's old age) What is the other way you had in mind? Note: two years later paying out means two year more paying in. So two years "effectively is 4 years".
- riku_iki 3y ago> * more tax on companies (which will just increase cost of work and thus drive jobs elsewhere) this is false statement. Corp tax usually applied on profit after wages paid, thus doesn't impact cost of work.
- ArnoVW 3y agoin the context of pensions, "tax on companies" generally means "increasing the employer part of social charges" (as apposed to the employee part). The French system requires that the various social systems operate as separate funds, at equilibrium, and does not foresee paying shortcomings from general revenues such as VAT or income tax. Hence, increasing the employer part of social charges increases the cost of work. Anyway, the direct tax burden on French companies is already quite high. This means that French companies have difficulties competing with foreign companies. Mutatis mutandis they either raise the price to compensate (and so are more expensive) or keep the same price and lose margin (and have therefore lower capacity to invest). Countries can fix tax levels as they want (it's one of few policy areas where European countries have full autonomy) but they can't use tariffs or import taxes to protect their market. We have all agreed to free trade, and the WTO will punish those who do. So in reality, you can't just tax any way you want, unless you want to destroy part of your local economy.
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- NoLinkToMe 3y agoIt's quite significant. Life expectancy is about 82 in France. Retiring at 62 vs 64 means: 1. Years of retirement: -2 2. Years of retirement payments: +2 3. Years of retirement fund returns: +2 (3) is significant because at the end the fund will have about 40 years of payments. Suppose an 8% nominal return for two years on average, this means you're getting about 16% on 40 years of savings, or ±6.5 years of savings, on top of 2 years of extra savings by working two extra years, on top of needing 2 years of fewer pay-outs, meaning the 20 year retirement is cut by 8.5 years, or a -42% decrease. Not to mention side benefits. (ample evidence that working and staying active longer, reduces healthcare costs on society, for example). I'm simplifying the calculations quite a bit of course, but this actually has a massive impact.
- pyrale 3y ago> Years of retirement fund returns: +2 There is no significant retirement fund in France's main pension scheme.
- DropInIn 3y agoWhen getting the life expectancy numbers did you exclude all deaths from before "working age"? Because a significant effect is imparted by childhood deaths to the average life expectancy, especially for men, and those individuals never contribute to any pension fund nor taxes. That has a massive impact on the results of the calculations.
- pyrale 3y agoThis political debate was shitty enough when it happened, there is no need to rehash that political bullshit whenever you see the topic mentioned somewhere.
- p-e-w 3y ago> and vague populist "we'll just tax X" won't fix it The richest people and biggest corporations own such an unimaginably large amount of wealth that taxing them would fix just about anything. In 2017, Apple's cash reserves were $250 billion. That's just a single company, hoarding reserves that could clear the national debt of most countries. Think about that for a second. There is absolutely no shortage of wealth in the world. There is easily enough to pay all the pensions, including far into the future, even considering demographic change. But of course, if governments are OK with allowing corporations to act like sovereign countries, raising the retirement age can seem like a reasonable alternative to moving all that wealth to where it actually belongs.
- powercf 3y agoIf wealthy companies should pay French pensions, simply because they can, do you think that wealthy westerners should pay for, say, pensions or services in Africa? Raising taxes on wealthy companies to cover pensions seems arbitrary and unfair (by which I don't mean that taxes shouldn't necessarily be raised).
- riku_iki 3y ago> wealthy westerners should pay for, say, pensions or services in Africa? actually this sounds reasonable, and Western countries obviously pay already through various programs.
- p-e-w 3y ago> do you think that wealthy westerners should pay for, say, pensions or services in Africa? If they have business interests in Africa, absolutely. The world's biggest corporations are profiting massively from having access to the French market. But that access is not a given, it is being granted by the French people, and can be taken away at any time for any reason the French people consider valid.
- cpursley 3y agoCare to break down the actual math of how that would work?
- DiogenesKynikos 3y agoNote that that clause was added to the constitution as a consequence of De Gaulle's military coup in 1958. The coup is what created the extremely strong French presidency.
- ArnoVW 3y agoAnd that it has been used dozens of times since, by both sides of the aisle.
- estebank 3y agoI find it funny to use "both sides of the aisle" in the context of the French political system. > Usage of the term "aisle" comes from the United States Congress. In the Senate, desks are arranged in the chamber in a semicircular pattern and the desks are divided by a wide central aisle. By tradition, Democrats sit on the right of the center aisle (as viewed from the presiding officer's chair) while Republicans sit on the left. https://en.m.wikipedia.org/wiki/Aisle_(political_term) https://en.m.wikipedia.org/wiki/Aisle_(political_term)
- odiroot 3y agoDoesn't it actually come from UK houses of parliament?
- estebank 3y agoFrom the linked Wikipedia entry > a similar phrase used in countries operating under the Westminster system, is "crossing the floor"
- gilleain 3y agoSure, and the whole 'left' and 'right' system comes from 18th century French politics :) https://en.m.wikipedia.org/wiki/Left%E2%80%93right_political_spectrum https://en.m.wikipedia.org/wiki/Left%E2%80%93right_political...
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- southerntofu 3y agoJust because something is legal doesn't mean it's ethical. The french government has a long history of very legal genocides and working camps, for example. Those pension reforms were not "needed", unless you can argue it with a proper source. There was no present or foreseeable deficit for decades ; you say 2050 yourself. Moreover there's plenty of money around: Macron could just reinstate the ISF tax on wealth he removed, or he could fight corporate tax fraud which is in the dozens/hundreds of billions of euros every year. No, he just wants to tax the poor and redistribute to the rich. > We could have had a better reform, but I'll take a poor one over none at all You either say this because you are very young and not yet tired with work, or because you have very comfortable work that does not break your entire body. If you know some people working in factories, in trash collection, or in construction business, ask them what they think about working 2 years more before retiring, while white collars have pre-retirement champagne in the Bahamas built on their backs. Many blue collar workers do not even make it to the retirement age, and work injuries/death have increased dramatically in the past decade. Since the 19th century, human productivity has increased a hundred-fold. Scientists and politicians across the spectrum back then predicted we would soon have a 4-hour working day. How can you humanely justify taking all this productivity increase and giving all the benefits to the already-rich, even taking away some of the few scraps poor people have?
- Dalewyn 3y ago>Just because something is legal doesn't mean it's ethical. As long as a country is governed by rule of law, the only form of justice that should have any standing is legal justice. Ethical justice, more commonly known as social justice, has no place because that flavor of justice is going to vary wildly depending on the individual passing judgment. None of this is to say legal justice is inherently "right", laws can absolutely be malformed or otherwise unsuitable for purpose. But so long as the laws say something is "right", that is legal justice.
- southerntofu 3y ago> As long as a country is governed by rule of law, the only form of justice that should have any standing is legal justice. I don't disagree, but by this standard i don't know any country that is governed by rule of law. France and USA are very famous for high-profile corruption and criminal cases in which politicians/cops/CEOs are either not found guilty (of proven crimes) or somehow never end up in jail despite being convicted (such as in the Balkany case). As the cynical saying goes, make one crime for a million dollars, end up in jail. Setup a corporation that does thousands of crimes for billions of dollars, get rich.
- tehwebguy 3y agoFrance has an extra-constitutional mechanism for dealing with an aristocrat class, or so I heard in history class.
- Nasrudith 3y ago[dead]
- roody15 3y agoThis is a strange attempt at trying to justify a clearly undemocratic move that is widely unpopular. Ohh but the system said it’s constitutional to do it this way … as long as it’s only done a few times …. Ohh and it was necessary to protect the financial stability of France which has historic wealth inequality … lol. Sad times for western civilization.
- codedokode 3y agoFirst politicians make unrealistically high pensions to gain votes and then they find out that economy cannot sustain paying them. What a surprise. And now poor 62-year old Frenchmen have to work hard to pay for those politicians' mistakes. Also, I wonder, if the law is such controversial, why not hold a referendum? Why not let people decide for themselves, whether they want to raise the pension age or lower the pension to more realistic figures? I think that would be the most democratic way to resolve the issue instead of beating people by police.
- sofixa 3y ago> First politicians make unrealistically high pensions to gain votes and then they find out that economy cannot sustain paying them. What a surprise It took multiple decades for it to become unsustainable thanks to increasing life durations. > Also, I wonder, if the law is such controversial, why not hold a referendum Because fundamentally, if you ask people if they want to work 2 more years, very few will say yes. This is an unpopular decision, like carbon cutting measures, that is needed at the higher level, but few will choose to make the sacrifice.
- codedokode 3y ago> Because fundamentally, if you ask people if they want to work 2 more years, very few will say yes What's the point of democracy if you don't let people decide anything? (also what's the point of having a Parliament that doesn't decide anything). If people don't want to work, then lower the pensions to realistic figures.
- sofixa 3y ago> If people don't want to work, then lower the pensions to realistic figures. People don't want that too, of course. > also what's the point of having a Parliament that doesn't decide anything Parliament decides most things, it's just that there is the option to force stuff through them in limited types of scenarios and a limited amount of times (which they can refuse with a motion of no confidence). So it's not like the President can just rule by decree and do whatever they want. > What's the point of democracy if you don't let people decide anything? What can I say, democracy has it's flaws. People are easily attracted to empty populists that promise stuff that doesn't make sense, or would be downright catastrophic; politicians are incentivised to think short term (next election cycle) instead of medium and long term (nobody got reelected because they gave money to a nuclear research programme that is scheduled to finish in 30 years time). Having politicians with the guts to make reforms that are needed, even if unpopular, is crucial for the long term health of a country. Sadly it's quite hard to have that without spiralling into authoritarianism, and downright impossible to differentiate between that and a politician doing things for their own (friends/business partners) benefit - e.g. did Macron force this reform through because, as he says, he believes it's necessary to avoid French debts spiralling out of control, or because it will push more people into private retirement schemes and he's getting a cutback from that?