‘Fantasy economics’: Baby boomer vs. Gen Z tensions hit France as pension costs drive debt crisis and education cuts that fuel student protests
Source: Fortune ·
"Thus the fiscal pressure caused largely by France’s very generous government pension plan has led to cutbacks in other spending, notably on education."
From the source
Bond market turmoil and the simultaneous mass student protests at French schools are not a coincidence and point to the generational tradeoffs made in government spending, according to Nobel laureate Paul Krugman. In a Substack post on Thursday, the economics professor at the City University of New York’s Graduate Center acknowledged that the high debt and deficits driving up French bond yields lately are not unique to the eurozone’s second largest economy. In fact, the U.S. is guilty of the same fiscal sins, especially as aging demographics push entitlement spending up faster than revenue comes in. “But France does stand out, even among fiscally troubled nations, in one main way: its persistent inability to get realistic about retirement,” Krugman added. That’s as France’s official French retirement age, when workers can collect full benefits, was just 62 in 2023, while the average actual age of retirement was lower than anywhere else in Western Europe at only 60.4 years. Meanwhile,…