How to finance the increased need for redistributive policies?
We look at the case of France, but this question applies to all European countries. There are going to be significant needs for redistributive policies due to: The rise in energy prices, caused by both an imbalance between supply and demand for fossil fuels and the high (storage) cost of renewable energies; The rise in food prices , due to climate problems and the war in Ukraine; The collective feeling that low incomes must be increased, that the purchasing power of low-income households must be boosted and that the level of poverty is unacceptable; Housing costs, which are increasingly difficult for low-income households to bear; The high likelihood that scarcity (energy, agricultural products, metals, transport, electronic components) will be permanent , so the prices of many necessary goods will remain very high. If governments have to increase the size of redistributive policies, they must not finance this policy through debt, as they are doing today, but through taxes or by making savings o n other public spending, linked if possible to increased government efficiency. Debt should not be used to postpone paying for transfers to households.