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For those who read french, economist Olivier Bouba-Olga deconstructs political discourses that say it's just a question of reducing public spending and the world will be a better place:

Citation d'Alain Lambert:


De même, rappelons que les transferts ou les dépenses publiques ne créent aucune richesse supplémentaire ! Leur effet est souvent plus faible qu'on ne le croit puisqu'ils se financent par prélèvements sur les plus productifs, dont les prix de revient augmentent d'autant. Avec tous les risques de délocalisation d'emplois qui en résultent.

Premier point :  "les dépenses publiques ne créent aucune richesse supplémentaire". Je rappelle à Alain Lambert qu'il y a globalement consensus chez les économistes pour dire que la source essentielle de croissance d'un pays comme la France est l'innovation. Que pour une part importante, l'innovation se nourrit des dépenses de R&D, d'une part, et de main d'oeuvre (très) qualifiée (capital humain), d'autre part. Les dépenses publiques affectées  à l'éducation et à la R&D sont donc sans doute parmi les dépenses qui créent le plus de richesses... (on peut multiplier les exemples).

Deuxième point : [...]

Alain Lambert is a rightwing politician.

by Laurent GUERBY on Tue Aug 29th, 2006 at 02:49:22 PM EST
As always, it depends on what the money is spent on and how it is being paid for.  It's ridiculous for anyone to claim that public spending is inherently bad.

Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
by Drew J Jones (myfriends@thisispancakes.com) on Tue Aug 29th, 2006 at 02:51:52 PM EST
[ Parent ]
Lots of the "elite" are unfortunately spinning these ridiculous things.
by Laurent GUERBY on Tue Aug 29th, 2006 at 03:29:57 PM EST
[ Parent ]
As you probably know, they've been doing the same thing stateside since Reagan, with the added bonus of being complete hypocrites.  The only politician in the last twenty six years who has significantly reduced the size of the federal government is Bill Clinton.

Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
by Drew J Jones (myfriends@thisispancakes.com) on Tue Aug 29th, 2006 at 03:43:12 PM EST
[ Parent ]
Rfewre to Migu's excellent Keynes diary a few weeks back

You can't be me, I'm taken
by Sven Triloqvist on Tue Aug 29th, 2006 at 04:14:38 PM EST
[ Parent ]
Quick summary in English:

Alain Lambert, former Budget Minister:

transfers or public spending create no supplementary wealth... They are financed by a levy on the most productive, whose cost prices rise... With risk of job outsourcing...

Econ blogger Bouba-Olga:


  1. Vital innovation feeds on R&D investment and highly-qualified labour (human capital)... Public spending on education and R&D is doubtless therefore wealth-creating...

  2. Competitivity of enterprises depends to a large extent on the environment they find in the country, (labour skills, research labs, communications and transport infrastructure, framework of everyday life [eg public health], etc)... Public spending can bring company costs down if they provide positive externalities for which enterprises don't pay the full price...

  3. Outsourcing? Or Direct Foreign Investment, which continues to be very high into France? France is highly competitive re company costs, see report by KPMG...
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Aug 29th, 2006 at 03:35:31 PM EST
[ Parent ]
"if they provide" = "if it provides"...
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Aug 29th, 2006 at 03:37:26 PM EST
[ Parent ]
This seems to be the 'If I personally haven't got it to spend, it doesn't exist' school of economic theory.

It's not so much autistic as narcissistic.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Aug 29th, 2006 at 06:23:52 PM EST
[ Parent ]

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