He held there is deficit requires a lender

Whenever I hear talk in responsible workplaces, "structural" deficit, and this was the case twice this week (Wednesday about the tripling of the budget deficit and Thursday about the social security), I remember the effect of surprise that Jacques de Larosière was a day created in a debate on the good or bad economic governance. The repetition of the ideas in fashion began to annoy. The former Director General of the Monetary Fund asked for the floor. He held: "there is deficit, requires a lender."

Drown the deficit, as do turn Christine Lagarde and Eric Woerth in macroeconomic considerations leads the two Ministers to give an extraordinarily static definition to freeze their fiscal policy. A to reduce it to an exercise of "wishfull thinking." It is cut into slices equal to 141 billion deficit this year: a "structural" slice corresponding to a deficiency of some kind of cruise of about 45 billion to which are added a loss of tax revenue estimated to be 57 billion and a disbursement of 39 billion in respect of the recovery plan. The ordinary deficit will continue to be dealt with by the usual method of "gel" (sic) expenses in volume. The other two slices, related to the crisis, they are by occasional nature and intended as such to disappear gradually (there still feet on Earth) with the cause that gave them birth. The policy stimulus is provide.

The analysis thus presented leaves a cryptic question relating to the behaviour of the lender and not only to the imagination of the solicitor. The Enigma is similar to the famous "conundrum" (same meaning) which previously troubling Alan Greenspan (why long-term rates remain low). This is therefore a country, the France, whose borrowing on the market this year, financial crisis, a record level. And the enormous appeal of fresh money to which it is passes as a letter in the mail! The markets appear similarly indifferent to the social security deficit leaping 8 to 23.5 billion euros with point of view their rise in 2010. Interest rates are oriented downward.

End of 2007, the detention by non-residents of the public debt of the France seemed to stabilize around 60. Generalized confidence crisis that triggered the collapse of the "sub-prime" mortgages created an extraordinary buzz among investors for the titles "sovereign". The France, with the highest rating, took advantage to full. End of 2008, non-residents will hold 65 of its public debt in the meantime greatly increased. End of August 2009, 66. Of course, they cash the same proportion of the interest paid by the State to its creditors (approximately 22 billion on a total of 42 scheduled for next year).

It is in these circumstances that we saw this year occur what was unthinkable yesterday: 55 of the expenses of the State covered in peace time by borrowing. Financialization (inseparable part of globalization) of the management of public finances is necessarily a weakening of the standards, and reflexes, management. Example: in response to the explosion of spending, the Government of Nicolas Sarkozy cut taxes.... He could not do so if this contravened the new-look criteria of the financialization which took hold on the economy in all countries with a modern financial market. Its function is to trivialize the debt, seen as a sign of flexibility and maturity.

There is a counterpart to this extraordinary transformation of the public sector now free - as long as it will work - the discipline of tax, in other words the budget balance. It's capitalism without capital where banks and large companies replace equity by debt and the "active management" - handling - cash flow. The problem is that these practices oppress the multitude of suppliers and subcontractors. He spent almost more week unless the Government announces a programme of support to any particular sector. The crisis has strengthened the grip of the financialization on the economy. The reign of the "culture of the deficit" will destroy more jobs. It will ignore the school classification concocted by experts of Bercy.