Tag Archives: GDP

The biggest welfare state in the world is France

I need to follow up my recent article about tax, GDP, a free lunch and big governments. The Biden administration is calling for a tax hike and a much bigger government. Is the United States on the way to be a socialist country like France? If so, how would that be?

Let`s take a look at France. The biggest welfare state in the world. No other coutries in the world spend more money on welfare than the French government. No other coutries has higher taxes either.

But who is protesting a lot? No other countries in the world are protesting more than the people of France, and the yellow vest protesters showed us that. There were multiple reasons for all the protests in France. What they all had in common is that they were all dissatisfied.

Does the people of the United States really want to be a socialist state like France?

Photo by Alex Azabache on Pexels.com

First of all; lets talk about tax. No other countries in the world have higher taxes than France. Personal income tax has dropped to 45%, down from 59,6% about twenty years ago. In other words; half of your hard earned money goes to the government.

Corporate tax rate in France dropped to 28% under president Macron. Do doubt that Macron is doing something right. A Trump strategy that is boosting the economy with lower taxes (but that was before the covid attack).

In the early 80`s, the corporate tax rate in France was at a record high with 50%. All that happened under President Fracois Mitterand who served as a President of France from 1981 to 1995, the longest time in office in the history of France.

Mitterand started political life on the Catholic nationalist right, but joined the resistance and moved to the left. He opposed Charles de Gaulle`s establishment of the Fifth Republic.

He invited the Communist Party into his first government, which was a controversial decision at the time. In the event, the Communists were boxed in as junior partners and, rather than taking advantage, saw their support erode. The left the cabinet in 1984.

Interestingly, right after that, the taxes started to decline. Mitterand followed a radical left-wing economic agenda, including nationalisation of key firms, but after two years, with the economy in crisis, he reversed course.

He pushed a socially liberal agenda with reforms such as the 39-hour week, and the end of a government monopoly in radio and television broadcasting.

His partnership with German Chancellor Hermut Kohl advanced European integration via the Maastricht Treaty, but he reluctantly accepted German reunification. By the way; he was also the only French President to ever have named a female Prime Minister; Edith Cresson.

Beyond making the French left electable, Mitterand presided over the rise of the Socialist Party to dominance of the left, and the decline of the once-mighty Communist Party (as a share of the popular vote in the first presidential round, the Communists shrank from a peak of 21,27% in 1969 to 8,66% in 1995, at the end of Mitterand`s second term).

As you can see, the popularity of the Communist Party declined from about 21% to 8%, but so did the corporate tax rate under Mitterand too.

But taxes need to come from someone, and that is the people. How is that going to work out if millions are unemployed? In France, the unemployment rate has always been high. It dropped to 8% in December of 2020, down from 9,1% in the previous period.

The number of unemployed people decreased by 340 thousand to 2,4 million. That sounds expensive. Someone has to pay for it.

France spend nearly one third of their GDP on social welfare, according to OECD. France are on top of the list (27,5) while the U.S is number 22 with 14,3% (as a percentage of GDP).

If we look at total net social spending, France is still at the top with 31,7%, but interestingly, the U:S is second with 30%. Total net social spending takes into account public and private social expenditure, and also includes the effect of direct taxes (income tax and social security contributions), indirect taxation of consumption on cash benefits, as well as tax breaks for social purposes.

Top 20 list of all the countries with tax revenue as a percent of GDP from 40% to 50% are all from Europe. except one; Cuba, at number 8 on the list. A communist country among all the European countries.

The debt in France is skyrocketing. Under Mitterand, the debt to GDP was about 20. Now, under Macron it has increased to 115,70 percent in 2020 from 97,60 percent in 2019.

At the same time, Government Budget in France decreased to -9,20 percent of GDP in 2020 from -3,10 percent in 2019. In other words; the government spends more money than it takes in from taxes and other fees.

So, socialist welfare state France has more debt than the United States. Devt to GDP in the U.S increased to 107,60 percent in 2020, up from 106,90 percent in 2019.

The unemployment rate is also lower in the U.S. The unemployment rate fell to 6 percent in March of 2021. The U.S government is also spending more money than they have. In 2019, the U.S recorded a government budget deficit equal to 4,60 percent of the GDP, but it`s expected to be about 13 percent in 2020.

On top of all the taxes, people in France also need to pay for the roads. A typical socialist country has toll roads. From Boreaux to Paris, you need to pay 55,60 euros for Classe A and 85,60 euros for Classe B.

All the money you earn from Janury to June goes to the government. The govenment will give the money you give them to sick people who ask for free healthcare. State healthcare insurance is available to everyone staying in France for more than three months.

The French Social Security system runs this insurance (called PUMA), and this insurance covers about 70% of the medical costs, and in some cases, even 100% of the costs. The state also pays for every child`s education from 6 to 16 years old.

So, if you pay nearly half of your hard earned money to your welfare state, and drive a car from Boreaux to Paris often, you have to ask yourself what your real tax actually is?

To contact the author: post@shinybull.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shinybull.com. The author has made every effort to ensure the accuracy of the information provided; however, neither Shinybull.com nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities, or other financial instruments. Shinybull.com and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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The most popular president in US History inaugurated today

Joe Biden was sworn in as the 46th president of the United States of America today. In his speech he said; «Today, we celebrate the triumph not of a candidate, but of a cause, the cause of democracy. The will of the people has been heard and the will of the people has been heeded.

We have learned again that democracy is precious. Democracy is fragile. And at this hour, my friends, democracy has prevailed.» (big applause)

Joe Biden, President, American Flag

Democracy is a form of government in which the people have the authority to choose their governing legislator. Joe Biden was the most popular candidate in the US and won the election in 2020. It is the people`s will. The people decided.

The most popular president in US history was inaugurated today. He got more votes than Obama and Clinton. Biden won despite the fact that Trump got 10 million more votes in 2020 than he did in 2016.

The streets in Washington during the inauguration ceremony were empty. Instead of thousands of Americans cheering, we saw thousands of flags on the streets. Instead of happy American people on the streets in Washington we saw 30,000 armed soldiers behind a massive 12-foot electric wall.

The love for Joe Biden was huge in the Hate Trump Media today. «The reason Biden has to do this is that he`s just so incredibly popular,» Don Lemon said on CNN. «The lights from Lincoln Memorial were like Joe Biden`s arms stretching out to all American,» CNN said.

The incredibly popular president is considered to construct economic policy around issues like race, gender, equality, and climate change, rather than around traditional indicators like GDP or deficit ratios.

According to Axios, Biden is charting an economic policy that`s visible to the left of Bill Clinton and Barrack Obama. Biden proposed a $1,9 trillion economic stimulus plan and a $15 minimum wage. Employers, employees, and economists warned it will kill millions of jobs.

Joe Biden signals a shift away from fossil fuels and rejoins WHO and Paris climate agreement. Trump walked away from Paris agreement because he said it was too expensive for American workers. He wanted people to keep their jobs.

It will be difficult for Biden to balance the need to address the climate crisis without worsening the jobs crisis facing the United States. But his plan calls for pouring trillions of dollars into clean energy, creating millions of union jobs while slashing carbon emissions.

European commission president Ursula Von Der Leyen tweeted this; «The United States is back. And Europe stands ready. To reconnect with an old and trusted partner, to breathe new life into our cherished alliance. I look forward to working together with @JoeBiden.

President Joe Biden calls for unity. Good luck!

To contact the author: post@shinybull.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shinybull.com. The author has made every effort to ensure the accuracy of the information provided; however, neither Shinybull.com nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities, or other financial instruments. Shinybull.com and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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The Japanese economy shrank -7,8 percent in Q2 and that is the steepest decline ever

The Japanese economy shrank -7,8 percent in Q2 and that is the steepest decline ever. This was the third straight quarter of contraction which means Japan is in a deep recession amid the severe impact of the COVID-19 crisis.

Private consumption fell -8,2 percent vs -0,8 percent in Q1. Exports plummet -18,5 percent which is the most since Q1 2009. The economy collapsed 27,8 percent in the June quarter, and that is the deepest on record.

Japan was the tech darling in the 80`s. Their consumer electronics industry was once considered the strongest in the world. But now the tech giant is in a state of decline as consumption arises in countries like China, the United States, and South Korea.

However, video gaming in Japan remains a major industry. Japan became a major exporter of video games during the golden age of arcade video games, an era that began with the release of Taito`s Space Invaders in 1978 and ended around the mid-1980s.

Japan dominated the industry until Microsoft`s Xbox consoles began challenging Sony and Nintendo in the 2000s. That being said; Japan is now the world`s largest market for mobile games.

Japan`s strong economic growth ended with a big crash in the late ’80s and early ’90s. In the late 1980s, abnormalities within the Japanese economic system had fueled a speculative asset price bubble of a massive scale.

The bubble was caused by the excessive loan growth mechanism known as the «window guidance». As economist Paul Krugman explained; «Japan`s banks lent more, with less regard for quality of the borrower, than anyonw else`s. In doing so they helped inflate the bubble economy to grotesque proportions.»

Trying to deflate speculation and keep inflation in check, the Bank of Japan sharply raised inter-bank lending rates in late 1989. This sharp policy caused the bursting of the bubble and the Japanese stock market crashed.

Equity and asset prices fell, leaving overly leveraged Japanese banks and insurance companies with books full of bad debt. The financial institutions were bailed out through capital infusions from the government, loans and cheap credit from the central bank, and the ability to postpone the recognition of losses, ultimately turning them into zombie banks.

The Japanese asset price bubble was an economic bubble in Japan from 1986 to 1991 in which real estate and stock market prices were greatly inflated. In early 1992, this price bubble burst and Japan`s economy stagnated.

The bubble was characterized by the rapid acceleration of asset prices and overheated economic activity, as well as uncontrolled money supply and credit expansion. More specifically, over-confidence and speculation regarding asset and stock prices were closely associated with excessive monetary easing policy at the time.

As a result of all this mess, Japan started to «print money» like never before, and now Japan recorded a government debt equivalent to 236,60 percent of the country`s GDP in 2019. Someone has to pay for this, but who? The people of course.

The Personal Income Tax Rate in Japan stands at 55,95 percent, which means more than half of the people`s hard-earned money goes to the Government in Japan. On top of that; their interest rate is negative at -0,1 percent which means people have to pay money to the bank and not otherwise if they have money stored in the bank account.

Policymakers noted that the outlook for economic activity and prices are extremely unclear, depending on the consequences of the virus and the magnitude of their impacts on domestic and overseas economics.

To contact the author: post@shinybull.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure the accuracy of the information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities, or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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The Eurozone has entered a steep recession and face the biggest drop in GDP on record in Q2

It is now confirmed. The Eurozone saw the biggest drop in GDP on record in Q2. The Eurozone economy dropped 12,1 percent in the three months to June 2020. But this is not as bad as the UK, which is the worst country in Europe.

COVID-19 hit the economy hard in Europe. The invisible enemy also hit the demand for services and goods. As you can see from the chart below, the Eurozone has entered a steep recession and a new wave of viruses can push the Eurozone into depression.

Poland`s GDP deopped 8,2 percent YoY in Q2 of 2020, and that is the biggest decline on record. The Dutch economy shrank 8,5 percent on quarter in the three months to June 2020, and that is the biggest pace of contraction since comparable records began in 1988.

The United States started a New World Order right after World War II, but that system is now broken. Donald Trump is making new trade deals and Brexit makes the UK Boris Johnson to do the same. They are rebuilding the system.

Looking at the growth around the world is funny. Singapore is suffering with a drop of 42,9 percent in GDP QoQ 2020. Next on the list is the US; down 32,90 percent.

But here is the funny thing; before the UK which is down 20,40 percent, communist country Venezuela`s growth dropped 23,70 percent. So, Venezuela is in the middle of the United States and the United Kingdom.

On the other end, China`s growth QoQ is up 11,50 percent, followed by Bangladesh (8,20%), Vietnam (6,88%) and Pakistan (5,79%).

The coronavirus is a threat, but a wave of corporate bankruptcies is a much bigger threat. The world is sitting on a bankruptcy time bomb.

To contact the author: post@shinybull.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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The UK GDP plummeted 20,4 percent in Q2 of 2020, and that drop is the biggest since the records began in 1955

The growth in the UK has been almost flat for a very long time, but an invisible enemy called COVID-19 made it worse for the UK. The UK GDP plummeted 20,4 percent in Q2 of 2020, and that drop is the biggest since the records began in 1955.

The drop means that the UK, like the US, is officially in a recession. People were told to stay at home and that is expensive. Private consumption accounted for more than 70 percent of the decline in the GDP in the UK, and that is down by 23,1 percent. Fixed capital formation also plummeted -25,5 percent.

At the same time, there is good news from the UK. Industrial production skyrocketed 9,3 percent month-over-month in June 2020. That is the biggest jump in industrial output since March 1972. The jump came after the lockdown due to the coronavirus pandemic.

More good news; manufacturing grew 11 percent, and that is the largest increase since records began in January 1968.

The unemployment rate in the UK came in yesterday, and it stood at 3,9 percent in Q2 of 2020. The unemployment rate is unchanged from the previous three-month period and below market ecpectations of 4,2 percent, as many people gave up looking for a job and who were therefore not considered to be unemployed.

Approximately 7,5 million workers were away from work in the UK in June with over 3 million of these being away for three months or more.

The UK is in a recession and hard times are here to stay for a while. I will not be surpriced if the unemployment rate rice in the future.

To contact the author: post@shinybull.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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