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French Science and Higher Education Programs Avoid Austerity
ananyo writes "Bucking a trend of cutting science seen elsewhere, the French government has committed to increasing spending on research and development in its draft austerity budget for 2013. France's education and research ministry gets a 2.2% boost under the proposed budget, giving it a budget of just under €23 billion (US$29 billion). Most other ministries get a cut. The upshot of the cash increase is that 1,000 new university posts will be created, no publicly funded research jobs will be cut and funding for research grants will rise (albeit less than inflation) by 1.2% to €7.86 billion. The move to spend on science during a recession is notable and means that French politicians understand that a sustainable commitment to public spending on science is vital for long-term economic growth. The situation is in stark contrast to that in the U.S. and in the UK, where a recent policy to boost hi-tech industries, unveiled with much fanfare, failed to do much for science. Meanwhile, in Australia, there's alarm over proposals to freeze research grants— a step that could jeopardize 1700 jobs."
Social programs cost a lot of money, much of which seems to go to those administering the programs, and not to the intended recipients.
Research is -- on the scale that government or really large corporations operate -- cheap. It is a relatively small portion of the budget and yet returns value over decades and centuries.
Some unsung R&D programs like the military, NASA and our espionage programs are also worth spending on.
I don't understand austerity; is the idea "sacrifice tomorrow to pay for today"? I bet that will work about as well as it sounds.
Congratulations to the French on ducking this foolish trend and instead supplementing education and research.
Since Piaget et al times, France always gave priority to education and science. One example is the AEFE network of French Schools abroad (For instance, check here for an insight), with their trademark of academic excellence. No other country have such kind of networked schools abroad. Illegal immigration from Africa, unskilled immigrants mainly, supposed them a lot of problems, but investing in education and science, is the best possible bet to face problems with long term vision. It's amazing how other first world goverments lack such basic common sense.
Social programs cost a lot of money, much of which seems to go to those administering the programs, and not to the intended recipients.
I'm pretty sure where the money ends up is all public information. You could get off your ass and show us some numbers instead of issuing vague assertions with absolutely no citations.
Research is -- on the scale that government or really large corporations operate -- cheap.
Oh yeah, particle accelerators come in six-packs at CostCo for $43. And you can pick up DNA reading chips at Walgreens for $5. Oh and a cloud of computers or a super computer is basically free for anyone who wants one. Who writes this kinda shit?
I don't understand austerity; is the idea "sacrifice tomorrow to pay for today"? I bet that will work about as well as it sounds.
Right, you can tell the Greeks that they should have just kept spending spending spending.
Congratulations to the French on ducking this foolish trend and instead supplementing education and research.
Congratulations for commenting on a complex issue without speaking French or understanding what sort of crisis Europe may be on the verge of.
"I don't understand austerity; is the idea "sacrifice tomorrow to pay for today"? I bet that will work about as well as it sounds."
Well, yes. Yes, it is "sacrifice tomorrow to pay for today", because unfortunately for a few decades the idea has been "spend tomorrow's money today" or "borrow money from the future", and we've run out of credit. AKA "deficits don't matter".
Since 2008 we've been finding out what happens when you borrow too much money from the future. "Austerity" has become popular because there's no more that can be borrowed from future earnings. It's tapped out. It's at or near the limit, and beyond that is financial disaster. And you're right that failing to invest in the future (e.g., infrastructure, education and research) won't work out well either, but we should have clued into that before choosing to be backed into a corner by debt costs.
It's like half the world has been partying and running up a huge bar tab, and now the bill has come due. The financial hangover is bad, and it will have long-term consequences for an entire generation. Hopefully people learn the lesson that persistently running countries on debt for long periods of time has long-term consequences that should be avoided by not implementing tax cuts and more spending in good times until debt is paid off (or at least reduced to manageable levels), so that you're ready for the next economic swing.
France spends the same as UK on military, behind only US, China, and Russia.
US spends vastly disproportionately, but that does not mean France free rides on US defense. What it means is that USA has taken it upon itself to be the global police man / bully, and other countries are behaving as completely rational actors.
Also, the problem with USA is the terrible corporate corruption everywhere. Take healthcare expenditure for example. USA spends double per capita what any other developed country spends, for worse outcomes in most objective metrics. This is largely due to "inefficiency" (read: corruption) at all levels, much of it with the blessing (or even legislated) by the government. Health spending dwarfs even the bloated military budget, which gives you an idea of how much "budget freedom" USA would have if they could ever get their shit together.
By the way, there is no reason to believe any other area of spending is more efficient. I can't believe military expenditure in USA produces results as efficiently as spending the same dollar in China or Russia. For hundreds of billions of dollars per year every year for more than 10 years, you would have hoped they'd have come up with the technology to beat a bunch of disorganized and poorly equipped tribes of religious fanatics in Afghanistan.
And France may not be so strong in medical research at the moment, but this is all the more reason to increase investment in science and higher education programs. You're basically saying "oh, they're saving money by not investing in science and research, which gives them budget freedom to invest in science and research." Does not compute.
I am confused by your statement "I don't understand austerity". From my viewpoint, it is simple: pay for the programs you implement, don't leave it to your grandkids to pay for. In my country, we have Social Security. I like Social Security, it is a good idea. yet we ahve this notion that seniors have paid for their benefits. The reality is that the current generation of recipients paid between 50-70 cents on the dollar for the benefit they are receiving. My generation will likely be in the 70-75 percent range. At some point, someone has to pay for the shortfall, and it will likely be my kids and grandkids. That is a horrible sign of selfishness and immaturity.
I am a huge proponent of R&D. However, I will not agree with spending more than we bring in over an extended period of time. The 'resession" we went through was mild, and some deficit spending may have been a good idea. But 12 years and nearly 10 Trillion in deficit spending will hobble us for a long time to come.
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I don't understand austerity; is the idea "sacrifice tomorrow to pay for today"? I bet that will work about as well as it sounds.
Austerity in tough times is ass-backwards: it feeds the economic vicious cycle. The only sensible way to run a country is to set spending at a long-term sustainable level, borrow to maintain that level when times are tough, and pay the debt down when times are good.
Unfortunately, most countries are run by politicians, so when times are good they cut taxes and go on a spending spree instead of paying down the public debt. Then when times are tough the find themselves in a real jam. (Cf. USA, 2001-present.)
Sheesh, evil *and* a jerk. -- Jade
We've had the Open University in the UK since 1969. One of it's more successful initiatives was putting lectures and demonstrations on TV at stupid-o'clock in the morning (only 3-4 channels back then) for it's student to videotape and watch later, with other course material being transmitted in the post. I don't know how much of an issue plagarism has been since the Internet grew in popularity, and it's perfectly possible that such distance learning has now had it's heyday.
I really hope it hasn't - at £5000/year full time, it's tuition fees are considerably lower than the £9000/yr everyone else seems to be charging for an undergraduate degree. When you take into account the student loans that everyone here takes out to pay them, lower tuition fees seem like a good way to reduce our reliance on credit.
yeh, the French know that sacking the public sector in times of crisis does not help the economy; quite the reverse in fact. M. Hollande is old school ENA (Ecole Nationale d'Administration) which turns out highly-educated senior French bureaucrats and politicians, who, whatever else they may be, are not daft.
You can never eat too much, only cycle too little.
In France, they call it .1% ahead of inflation.
So basically they are keeping up with inflation?
Troll is not a replacement for I disagree.
Simply because the US spends more money on war industries does not mean that France is not getting a free ride. The reason for the tremendous spending doesn't negate the fact that the US and France are tied together in NATO and that France does benefit from the US excessive spending.
by Mike Buddha -- Someday the mountain might get him, but the law never will.
So, France is going to cut (or at least pretend to cut) deficits from 4.5% of GDP to 3% of GDP, while hiking taxes.
That is not real austerity. You know what real austerity is? Cutting spending until it matches the amount of revenue actually coming in. This is the hard discipline that the vast majority of private enterprises have to adhere to, but which no government with a European welfare state seems capable of.
No Eurozone country (with the possible exception of Estonia) has actually practiced real austerity. You know that "Greek Austerity" measure, the one that had Greeks rioting in the streets? That reduced deficit spending from 9.0% of GDP to 7.5% of GDP. And even that amount was probably a lie.
Politicians need deficit spending the way a junkie needs heroin because the cradle-to-grave welfare state is unsustainable, and no one is willing to face up to that fact. And the price of that delusion will be the destruction of our economy.
Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)
http://www.lawrenceperson.com/
I don't understand austerity; is the idea "sacrifice tomorrow to pay for today"? I bet that will work about as well as it sounds.
There are only three options:
1) Cut spending to match tax income.
2) Increase taxes to match spending
3) Borrow and hope that your economy grows enough to pay for it (or just create inflation).
You have to understand how deeply in the hole some of these countries are. France is trying all three; they've increased taxes, cut spending, and they're still borrowing.
Each strategy has advantages and drawbacks. Each strategy can fail horribly. The 'best' strategy obviously depends on the exact details of the situation.
In the US, we're deep in a hole, too. Romney is hoping to go for the hail-mary pass of #3 and growing the economy. It's not clear what Obama wants, other than canceling the Bush tax cuts for the rich, but unfortunately that won't raise enough revenue. If anyone knows what his plan is, please let me know, because this is an important point to deciding who to vote for in the next election.
"First they came for the slanderers and i said nothing."
The problem is that some of that spending spree goes into persistent costs like salaries and hiring extra people. Then when times get tough, these people still expect to be paid, and you're going to have problems firing them in the public sector. So instead non-unionised expenses get cut since tax revenue has dropped considerably, and taxes are increased to pay for non essential costs while more important services suffer. Some departments even go so far as to deliberately cut important services in order to offload the pain on the public and cause an outcry, its a machine that has long since ceased to function correctly.
The proper way to run a country is to decide what services you want, what level of those services you want, and then work out the best way to keep costs to a minimum while providing those services. Tax according to those costs, and justify every increase by pointing to a corresponding expense. If people don't want the better services, they can simply refuse to pay the higher taxes and live with the services they have.
That would be in an ideal world anyway, where people getting paid from the tax coffers aren't looking out for themselves rather than the people who pay them, herded by politicians with one eye on the next election. I guess Germany on the national level would come closest, although on the local level its just as indebted as any peripheral nation.
And for pity's sake don't increase spending on persistent costs just because the same tax revenues start booming. Play it smart like Norway and put the money into a massive investment fund, or into infrastructure if its cheaper than loans.
"Long term sustainable" is too vague a goal to have much use, especially in modern rapidly changing economies.
Spending more would not a problem at the moment, for example, as borrowing costs for the US are so ridiculously low.
Most of the money that the government borrows and spends makes its way through the system and ends up buying... bonds. And in this way, all this debt is someone elses assets A state without debt is simply not as desirable a thing as it may seem. Nor is debt as deadly for a state as for a person.
One of the biggest problems with the political discussion arround issues of debt is that a vanishingly small number of people understand that money at the level of a nation state follows a completely different dynamics that money at the family household level.
With respect to booms and busts - the problem is that we are relearning the lessons from the great depression. For a long time after that, the cycles were rather mild.
Right now, academic performance has no bearing in you getting an award for college, only economic need. This is insane. I would certainly expect that there be some type of demonstration of capability and desire before one gets aid. Other countries do it, and I wish the US did as well.
Have you seen the amount of aid the students get (not loans, just aid)? It's not enough to fund a 4-year university education. No where near enough. Right now the maximum amount of federal Pell is $5,500. After that you have access to state-grants that range from a maximum of $3000 to $5000 per academic year If you qualify, if the money is released, and if you get your application in by X date each year. It's enough to put you through a trade-school or community college, absolutely. But, it's not going to make anyone wealthy, or provide anyone with immediate and debt-free access to university - don't act like it will.
ALSO - Academic performance has a HUGE bearing on scholarships, fellowships, assistantships and the like. These are how to successfully get your college/university career paid for with no strings attached. Don't confuse aid with loans; they're two separate things. If you are saying that there should be an academic proficiency exam to have access to credit, we just crossed into new and exciting territory.
And I'm going to try to interpret what AC so eloquently stated: It's not that the government can't restrict access to aid and loans. It's the question of WHO gets to decide who has access? Who gets to be the person in charge of Millions and Millions of destinies?
My number one fear isn't a future without privacy - it's a future where we are tracked into careers based on standardized tests. I was told that I shouldn't go to college and I shouldn't really worry about trying to get a job outside of basic hourly retail and food-service. I was tracked through grade-school and high-school into technical programs instead of college prep. ALL because I screwed around on a handful of tests.
Sometimes people need access to money they might not have access to otherwise - it's not about giving the poor an advantage, it's about trying to level the playing field between rich and poor.
Side note - All of that technical crap didn't stick - I have two advanced degrees now and teach at the college and university level. - Sometimes tracking is incorrect!
Oh dear God....
You are correct that techically Congress passes the budget. However, the President doesn't simply "suggest" a budget and then that is the end. His budget has a huge amount of authority behind it and you'll find that his proposed budgets are far beyond our revenues. Do I give congress a pass? Of course not.
Ultimately, barring a congressional override, the President does have authority over appropriations bills in terms of veto powers. So if you issue is over my using a term incorrectly, you got me. If your point is that the President is powerless in the spending realm, you are incorrect. Please take your snarky better-than-you attitude elsewhere.
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Austerity in times of high unemployment and low interest rates is pointless and self defeating - unemployment means you have unused human capital, which could be used to make capital improvement and inprove the nations assets, not to use it is to throw that away and that is not even considering the human cost - second when interst rates are rock bottom, it means it is a good time to borrow, the US treasury can now borrow at 1% so if the US borrowed $1Trillion you would only pay $10Billion in interest/year, it is called buy low sell high - Finally in a macoeconomic sense, which is the level at which the US government operates since it can print money and consumes a good fraction of the nations GDP, you _cannot_ "borrow frrom the future" this is the stupidist statement have ever heard, who the fuck has a time machine? One person's borrowing is another person's savings - that is an identity, when the US government goes into debt, the private sector balance sheet improves (it is called deleveraging), if the private sector whiches to reduce its debt the money has to go somewhere, where it goes is US treasuries, which is US gov't debt - finally most of the US debt is not owned by foriegn counties, it is owned by US citizens.
Simply because the US spends more money on war industries does not mean that France is not getting a free ride. The reason for the tremendous spending doesn't negate the fact that the US and France are tied together in NATO and that France does benefit from the US excessive spending.
De Gaulle kicked you fucking americans out of France in the 1960s precisely because we didn't want to free ride on american nuclear deterrance. We spent hundreds of billions on creating a national nuclear deterrance program which no other country in Europe has done. Not even the UK, which has to ask US permission to use the nuclear missiles it carries aboard its strategic submarines.
So no free ride, we just spend better and of course we have higher taxes because of it (something that is anathema to americans). And we value education and welfare. No one is making you americans outspend everybody else in defense programs. No one at all. Yours is a choice, the choice to put weapons before the well being of your citizens.
The time of the marshall plan is long over. Get over it.
I don't understand austerity; is the idea "sacrifice tomorrow to pay for today"? I bet that will work about as well as it sounds.
Austerity in tough times is ass-backwards: it feeds the economic vicious cycle. The only sensible way to run a country is to set spending at a long-term sustainable level, borrow to maintain that level when times are tough, and pay the debt down when times are good.
Unfortunately, most countries are run by politicians, so when times are good they cut taxes and go on a spending spree instead of paying down the public debt. Then when times are tough the find themselves in a real jam. (Cf. USA, 2001-present.)
There is some irony in the fact that the Great Recession was brought on by an orgy of private borrowing against flawed intangible promises (e.g. mortgaged-backed securities), but people find it a horrible idea to borrow in order to invest in skills and knowledge.
Realistically, of the these 3 bases of running up a debt: faith in other people's promises, faith in the government, and faith in education, the most risky of the 3 is the one we worship the most. Yes, I know, the government is evil, and it weasels out of its obligations by printing phoney money, but at the end of the day, phoney money still spends better than evaporated contracts, even if you do end up having to spend more of it.
I don't understand austerity; is the idea "sacrifice tomorrow to pay for today"? I bet that will work about as well as it sounds.
Nope, the idea is "Don't sacrifice tomorrow to spend more today." Spending has to be paid for one way or another. Either now or in the future, directly via taxes or indirectly via inflation. There is no free lunch.
Many countries have been going on spending sprees and now they have to pay for it. Yes, it sucks. Yes, it is painful. Proceeding as usual (or increasing spending) will just make the pain worse, albeit in the future. Right now the US pays about $500 billion in interest per year. Our deficit is about $1.3 trillion. Our spending is about $3.8 trillion. That means roughly 13% of our budget and 38% of our deficit each year is spent paying interest on past spending sprees. Those percentages will only get worse as we continue our spending sprees. That is money that we could be using to pay for education, research, medical care, etc. Instead, we have to pay for over spending in the past. The goal of austerity is to no longer continue down that path and even to reverse it.
The only way to spend your way out of debt is if it actually stimulates the economy enough to pay for the debt. There is no evidence that has ever worked or is currently working (what do you think we've been doing for the last 5 years?). And no, LBJ didn't prove this worked, most of the worlds industrialized production was destroyed in World War II except in the US. The US then became a manufacturing leader and the economy made an astounding recovery.
My observation of the French and their attitudes towards speaking other languages is that they expect you to speak their language while in their country. Really if you are in a foreign country try to speak the language especially if you are American as you demand it of visitors to your country. Most of them know English but don't want to speak it as they are embarrassed by how poor they think they are at it (most speak it as well as the average US high school graduate). If you put forth the effort to communicate in French to a French person often they will respond back to you in English (yes you have an accent they recognize) and they don't get rude as you are putting forth the effort. This was based on my experience while I lived and worked in Paris for 3 months, my French coworkers were much more forgiving and even helped me to learn the language. When I arrived I knew very little (as much as I could absorb part time in 3 weeks in the US) and by the time I left I could hold a conversation that wasn't too complex.
Time to offend someone
I am confused by your statement "I don't understand austerity". From my viewpoint, it is simple: pay for the programs you implement, don't leave it to your grandkids to pay for. In my country, we have Social Security. I like Social Security, it is a good idea. yet we ahve this notion that seniors have paid for their benefits. The reality is that the current generation of recipients paid between 50-70 cents on the dollar for the benefit they are receiving. My generation will likely be in the 70-75 percent range. At some point, someone has to pay for the shortfall, and it will likely be my kids and grandkids. That is a horrible sign of selfishness and immaturity.
I assume you live in the USA. One way to permanently fund Social Security [1] would be to remove the limits on the tax (which is currently limited to an arbitrary $106k) so millionaires (who do receive SS benefits when they retire) have to pay the same overall % of income as middle-class and the poor.
This is but one of the more well known ways to fix shortfalls in government without having "our kids and grandkids pay". Perhaps we should remove corporate loopholes that allow companies to essentially pay no tax? The fact is, many corporations [2] and wealthy people [3] have lower tax rates than folks who are scraping to get by. I pay a significantly higher rate than Romney.
[1] http://www.epi.org/publication/webfeatures_snapshots_20050217/
[2] http://communities.washingtontimes.com/neighborhood/ad-lib/2011/apr/10/tax-evaders-wall-shame/
[3] http://money.cnn.com/2012/09/21/pf/taxes/romney-tax-return/index.html
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you _cannot_ "borrow frrom the future" this is the stupidist statement have ever heard, who the fuck has a time machine? One person's borrowing is another person's savings - that is an identity, when the US government goes into debt, the private sector balance sheet improves (it is called deleveraging), if the private sector whiches to reduce its debt the money has to go somewhere, where it goes is US treasuries, which is US gov't debt - finally most of the US debt is not owned by foriegn counties, it is owned by US citizens.
Thanks for the great post. most people have a horribly twisted view of macro economy, because they think being a currency owner works similarly to being a currency user. In reality it is often very much the opposite.
A currency user earn money so that he later can spend it. A currency owner spends money so that he later can tax it back.
The spending of a currency user is limited by the amount of money he has. The spending of a currency owner is limited by the unused productive resources of the economy.
It is perfectly possible for any country with a sovereign floating currency to have full employment at a decent wage. The real question is why most countries don't. And the answer to that question is that bankers and corporations (and their bought politicians) don't want full employment at decent wages, because when people easily can get jobs at a decent wage, they can't be coerced and exploited as easily.
Simply because the US spends more money on war industries does not mean that France is not getting a free ride. The reason for the tremendous spending doesn't negate the fact that the US and France are tied together in NATO and that France does benefit from the US excessive spending.
Can you give some examples of specific threats that NATO defends its member countries from, that they wouldn't be unable to defend against themselves given their current level of military expenditures?
Deficits don't matter. Either you can produce enough to cover consumption, or you can't; money is just an abstraction over resources. But since resources can't be borrowed from future (assuming you don't have a time machine), if you're running a deficit but there aren't bread lines the problem is in your bookkeeping, not in your actual production/consumption ratio.
No, since 2008 we've been finding out what happens when you let a bunch of powerful sociopaths to act free of regulation.
Austerity has become popular because it happens to be fashionable. It's all about pretending that you're an ascetic: you get the smug feeling of self-righteousness while others - the poor and the weak - pay the price. In that sense it's every bit as mindlessly self-indulging as the worst excesses of materialism. It's also just as insane, and will result in just as much damage, if not more - because a materialist wants everything no matter the cost, while an austerist wants to deny everything to everyone else no matter the cost, and the former position is merely selfish while the latter starts crossing over into scorpion territory.
And to whom is the bill due? Who has been supplying the beer of credit? Why, it's the very same half of the world that "owes" the debt to itself. Which is precisely why this is all so stupid: we are producing enough to cover our consumption, so the only thing this entire "crisis" consists of is a bunch of numbers going to one column or another. This is not an economical crisis, this is a financial crisis - and that's another way to say imaginary crisis.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
Austerity has become popular because it happens to be fashionable. It's all about pretending that you're an ascetic: you get the smug feeling of self-righteousness while others - the poor and the weak - pay the price. In that sense it's every bit as mindlessly self-indulging as the worst excesses of materialism. It's also just as insane, and will result in just as much damage, if not more - because a materialist wants everything no matter the cost, while an austerist wants to deny everything to everyone else no matter the cost, and the former position is merely selfish while the latter starts crossing over into scorpion territory.
Just to avoid any confusion: I'm agreeing with you. But let me add that austerity is even more devious that you say. While deficits may not matter, debt does. Only we often call it "credit." Banks created trillions of dollars in derivatives that amount to bets that are just a fancy way of getting around limits on capital reserves. They were allowed to once again merge investment banks with commercial banks; so not only did they over-leverage, they did it with your savings account and your pension fund. And, shockingly, it created bubbles everywhere, the largest of which being the real estate bubbles that are still waiting to pop all over the world. At some point all of this debt/credit has to be destroyed because the global economy simply cannot grow fast enough to compensate. You can either take it out of the banks---give them a "haircut," claw back some of the ill-gotten profits, inflate your currency (sorry, ECB), etc.---or you can spread the pain around by screwing poor and middle class people (the non-investor class). It is the choice of each government which path to take and the US and UK are poster children for letting the banks and the investors that got rich robbing us blind call the shots.
Banks ruined the economy? Better bail them out. Things still suck? Better give them easy credit. They won't lend? Start buying up their bad assets, too. Oh, now people are starving and out of work? Well, to quote the former Vice President of the United States; "Go f*ck your self!" We need austerity to avoid disaster! Well, worse disaster, anyway...
So we get "austerity" under the threat from bankers that they will jack up sovereign bond yields if we don't. (Because apparently we all believe that banks are more powerful than sovereign nations now.) Kudos to France for figuring out that governments have to spend during recessions because no one else can or will and that austerity just further weakens a country, mortgages its future, ruins entire generations of its citizens, and makes it even easier for banks to suck more blood out before its citizens rebel. And kudos to France for asking wealthy people to kick in a bit more to help get things going again.
Actually, I wrote my thesis on life experience.