When Does The Mucus Come In Ovulation

government deficit and the inability of promising policy

There is great concern of slippage public spending. Although the desire to reduce the deficit is real, she is struggling to achieve because of the inability of politicians to commit legally to citizens.

Public expenditures are they made properly? According to the Court of Auditors, this is not always the case . We learn, for example that:

"First Capital Budget of the State, the investment budget of the Ministry of Defence is essentially devoted to the financing of these weapons programs."

And I have already stressed my skepticism about the economic utility of military spending. We also learn that policies for human services have cost 6.6 billion euros to a profit difficult to assess, but certainly far short of goals from the report.

Apart from this single report, there are myriad examples of costly public policies such as VAT reduction in food ( more than 2 billion euros per year ) or the tax exemption of overtime the cost of which is exorbitant compared to profits .

We could discuss each expense and arguments to whether the expenditures are justified or not. But this is not the object.

The real question is why public spending are increasing they are, regardless of their effectiveness or the state of public finances? Why men policies that promise to balance the perpetually accounts of nations fail to not they? The fundamental problem is that they can not make any promises.

The inability to contract with politicians

The idea is described in an article in Acemoglu . The problem lies in the inability of politicians to credibly commit.

Take for example the gap between Sarkozy's program and its implementation is explained in detail in the book by Pierre Cahuc and André Zylberberg: The journey into history missed President Sarkozy which is given an excellent summary to this address. Why did the president does not keep its promises?

The scenario is classic: once in power, and once he was faced with protests, it was much easier for Sarkozy to give in to pressure groups which threatened the interests rather than going up at the end. In doing so, the reform of the taxi, the pension reform in the civil service, reforming the labor market ... no is really used up all the ambitions of the president and yet, some are totally gone in the opposite direction!

Things have been different if the politicians could agree by contract to the nation. Imagine that Sarkozy could say: "I pledge to solve the problem of funding pensions by 2010 through a collaborative agreement with social partners, otherwise, I would resign." This would prevent the government of trying to move without consulting a partial reform of pension funding. Or "I pledge to keep government deficits below 3%. If this commitment is not required by the end of my quinquenat, I revert to the nation 20% of salary that I received during my tenure. "

Currently, it is not possible because there is no provision in law for give such a legal contract. For this to work requires that the contract is enforceable, that is to say that there is a legal body that is able to charge if Sarkozy does not keep his promise on the deficit.

Such a possibility would be very beneficial for politicians. A promise to which we added a deal was strengthened its credibility and value to voters increased.

imagine that a politician will not do tax giveaways to the rich. We have more reasons to trust him if the fact of violating this promise comes with a significant financial penalty. Or if a candidate for election promises to unemployment down to below 8% in three years and to resign if he fails. It has much better incentives to choose carefully its reforms.

Similarly, when public spending is increasing and this raises the concern of citizens, a candidate may propose to pay a fine in proportion to the deficit if elected. And I think that if elected, can be counted on to reduce deficits if we know that the failure to achieve this objective may cost him dearly.