This “citizen’s economic primer” is a second edition [1] with an additional chapter devoted to inflation.
In the first part of the book, the authors argue, as opposed to the popular belief, that debt is not a burden for the future generations since the current generation already benefits from it through investments in infrastructure and public services.
They also promote the idea that, in times of crisis, one should not tighten the belt, since an increase in public spending will lead to a greater increase in activity through the effect of the fiscal multiplier: the ratio between the rate change in GDP and the rate of public spending.
Public deficits are thus necessary to achieve full employment or to finance collectively useful investments, but they are harmful in times of full employment where they have an inflationary potential.
This ideology goes against neoliberal politics, which argues that it is by producing more wealth that we can finance the social model, by working more (unemployment insurance reform) and longer (pension reform).
The second part is dedicated to the trajectory of the French debt in order to understand its evolution since 1945, and more precisely, the dependence on financial markets observed since the 1980s. Some economists believe that the increase of debt contributes to raising interest rates, which discourages private investment.
This raises the question of the public debt sustainability . The authors believe that a State’s reimbursement ability is linked to the strength and reliability of its tax system, as well as to the possibility of borrowing from banks and financial markets. They believe that the French public debt is sustainable, especially since more than 50% of French debt holders are not French resident. This level proves the attractiveness of the French public debt on a global scale.
Finally, the third part is a presentation of the solutions and manoeuvers to make public debt acceptable to all.
Since the COVID crisis and the return of inflation, the ECB has increased its key rates 10 times (between July 2022 and September 2023) aiming reduce inflation at the cost of an economic slowdown and a rising unemployment, thus limiting the ability of the states to collect tax revenues.
As a remedy, the authors recommend a comprehensive tax reform, focusing on three major areas:
1- Restoring the progressivity of income tax
2- Implementing an effective fight against tax evasion
3- Focusing on a better consideration of ecology, with the evocation of a Green New Deal
In conclusion, this book calls to get out of catastrophism, since public debt can be part of the solution and not the problem. They go against the grain of the policies applied for decades by successive governments and confront current political debates in the midst of the 2025 budget vote and the issue of financing the energy transition. The concepts are rather pedagogically approached and accompanied by technical sheets allowing each reader to understand all the contours of public debt and thus form their own opinion.
Éric Berr (University of Bordeaux), Léo Charles (University of Rennes 2), Arthur Jatteau (University of Lille), Jonathan Marie (Sorbonne Paris North University) and Alban Pellegris (University of Rennes 2) are members of the Économistes Atterrés.
Sophie Friot’s note
