Supporting purchasing power and conflicts of objectives for economic policies

We take the example of France, but the analysis concerns all countries. The government chooses to support household purchasing power to prevent it from falling as a result of inflation, particularly due to rising energy and food prices. This is leading to an additional fiscal deficit of around 2 percentage points of GDP in 2022. The objective of this policy to support purchasing power is perfectly understandable and acceptable, but it must be pointed out that it conflicts with other economic policy objectives: Since the fiscal deficit has a limit, public money devoted to supporting purchasing power cannot be devoted to energy transition, industrial development, education, healthcare, etc.; Supporting purchasing power, especially when it takes the form of energy price freezes, reduces the price signal associated with energy scarcity, and discourages energy conservation; It is possible that commodity prices will remain high for a long time; supporting purchasing power today therefore reduces the ability to do so in the future.