The Economic Impact of Social Welfare: What the French Protests Teach Us About National Debt

Introduction: The State of France and Social Systems

Mac: Hey folks, welcome back to the Mac and Mike show. I'm the good-looking, intelligent, and man about town Mac, and he's Mike. And we're going to talk a little bit today about a video that Mike sent me from a young lady purporting herself to be from the nation of France—specifically discussing those things that are going on in France today, although I don't think it's necessarily that different than what is happening in some other European countries. So, with that, Mike, I guess I'll throw it over to you and tell us about this young lady in her video.

Mike: Well, she was bringing up the point of the social systems in France and how they're out of hand and everybody expects more than they're able to provide. Did a little research, and France has the highest GDP to social program system—58% of their GDP goes to social programs.

Mac: Uh yeah, it's very close to 60%, and most of the other European countries and the United States, you know, something like 20 to 22%. At least in the Nordic countries that everybody points to in the United States, Nordic countries are a little higher, around 29%.

Mike: But the problem is they're running out of money. You know, we talk about the American debt-to-income ratio for our nation and how we're at 120%. Debt-to-GDP is enormous. Um, you know, if the social programs keep going, you know, we're going to find ourselves in the same position as France.

And they have an illegal immigration problem, they have a legal immigration problem. They're not as strict as other countries about getting people out, but that's starting to change, and it has to, because it's the young kids—just like here in America, it's the young people—who are more affected than anyone else. France was rather stable for people in our age group back then, and then they just kept increasing their social welfare systems, and it just gets out of hand. Then everybody expects... you know, it's the expectation. Once you give somebody something, you can't ungive it, right? If we're going to give you welfare at a certain dollar amount, we're never going to take it back—hard to think about. If we're going to give you retirement at a certain age and we go to up it by just a year or two to try and balance, you can't do that. You can't touch that because people came to expect it. So, between that and the immigration problem, the country is falling apart.

Protests, Schools, and Historical Parallels

Mac: When you sent me the video, I wasn't sure if it was AI-generated or if it was real. It was a very attractive young lady, maybe 30, but my guess is somewhere in her 20s. And I thought that the conversation she had with the general public was pretty mature for a woman of her age. But after watching the video, I was left with this sense that this was more than reporting about what was going on in France today, but rather a warning to other nations that what's happening in France could happen to you as well.

What was going on specifically in France at the time were protests against schools. This started several months ago where a suburban school district felt that they were having less money invested in the students of that school, and teachers and students held a mini-protest walking out of the classroom for better school books and better funding of their schools. But what's going on today, that original idea of schools needing to be equal has turned into a much broader scale protest. It's not necessarily school students anymore; it's a lot of people of military age—a lot of young men who are protesting—and we're not real sure whether they were protesting over the original idea or not.

Mike: Um, but your point about the nation's finances being damaged... it wasn't that long ago that the nation of Greece—remember when Europe created the European Union and all of these nations clommed together to create one economic union? They were envious of the American system and some of the other systems that had a great deal of both imports and exports and GDP. Well, if you remember, shortly after that, the nation of Greece almost had to declare bankruptcy. It was that bad. And that was based on the welfare systems and government handout systems that the Greeks had.

And if you're not a student of history, who was it Santayana that said, "Those who ignore history are doomed to repeat it"? But in order to save Greece—because Greece could have taken down the entire European Union—they saved them by forcing them into some austere measures of the welfare system. Basically, it came down to the nation of Germany underwriting the nation of Greece's debt. Now, that's great if you can get one nation to do that for another nation, but that's not going to happen to the United States of America. Our nation's GDP, and likewise our debt, is so great that no nation—no combination of nations—could underwrite our debt.

Global Trends, Domestic Protests, and the Economic Framework

Mac: As this pressure on the European Union continued, what happened to Great Britain? There was a time when Great Britain had Brexit—British exit from the European Union. While you can still use the euro in the UK, they've exited the European Union and are back on the English system of pounds.

What's going on in France has been going on in Great Britain for some time now: a significant number of protests, and it doesn't really seem to matter what the issue is. People want to have protests; people want to have the government having problems maintaining the status quo. When we look at what's going on in France, the average citizen is afraid to go outside. It wasn't that long ago in Seattle and other scattered cities around the country, we had these "no-go zones"—remember CHOP and CHAZ? Communities where elements of chaos literally took over parts of the city and the economy.

I do believe there are forces in the global economy—you look at things like the World Economic Forum, and you look at some of these socialists or communists who would prefer to not have the great stumbling block, as George Soros called the United States of America. I remember an interview where a Scandinavian reporter asked George Soros, "Mr. Soros, where is this new world order that you promised us?" And he said, "Well, the United States of America is the great stumbling block with its freedom, its liberty, and its capitalist economic system. We have to do something about that before we'll have a new world order."

I really believe that all of these things that you see around the country—Black Lives Matter, Antifa, Occupy Wall Street, and campus protests supporting Palestinians—are aligning together with the socialists and the communists. Their goals will absolutely destroy the nation as we know it, changing it into an organization that is much easier to control and less likely to be the economic powerhouse that we are.

Mike: Well, I think the same thing is going to happen that's happened in the past: the enemy of my enemy is my friend. I think you're going to see the Democratic party fracture. The centrist Democrats are saying, "We don't want any part of you social democrats."

When you really analyze what social democrats want, we can agree on some issues—like college tuition being too high. But John Stossel did a great job pointing out that the cost of living is not bad compared to when you and I grew up. Houses were smaller, and we didn't have all the gadgets. In America, we're a consumer society; everybody wants the latest and greatest. You look at other countries, and they don't consume like us. Going out to restaurants once a week is a once-every-six-months occurrence in a lot of countries.

Capitalism, Social Systems, and Law Enforcement

Mac: We are a consumer society because we have a capitalist economic system. Capitalism is the greatest system that allows the most people to bring themselves out of poverty. One of my favorite stories is Elon Musk, who came from South Africa as an immigrant with virtually nothing, and now he's the richest man in the world. You can only do that in a country with a great capitalist system combined with the economic opportunity provided by liberty and freedom.

Mike: And look at the Nordic countries. Everyone points to them as socialist, but they are not—they are capitalist countries with large welfare systems. Guess what? They have a robust police force and extremely high standards for legal immigration. You have to have a job, you can never be without a job, you have to be 75% fluent in their local language, and you have to pass extensive tests on their culture and history. But the socialists here in America say "defund the police" and "open the borders." That's not what any other country does—not North Korea, China, or Russia.

Mac: The organized police force is what gives us security and safety. The outcome of demonstrations like those in France is to push societies closer to a police state, a socialist or communist system, where a group of people control what others can and cannot do, limiting your freedom and liberty.

Another thing that hastens the change from a free society is crushing debt that cannot be repaid. Look at the French farmers driving their tractors through Paris, arguing against heavy regulations. Regulation comes with enforcement—often not men in uniform, but bureaucrats policing rules until people are driven out of business.

Look at Canada, too. When truckers peacefully protested the price of fuel by parking their trucks in Ottawa, the government took their license plates, invalidated their driver's licenses, froze their bank accounts, and turned off their credit cards—even targeting citizens who brought them food. What kind of society starves peaceful protesters? If the government can do that to individuals, it mirrors systems like China's social credit system, where minor offenses lower your score and ban you from public transportation.

Conclusion: The Value of Prosperity and Generosity

Mac: To see France having this terrible collapse is heartbreaking. A bunch of immigrants have moved into France, decided they don't like the way it is, and want to turn it into another country by burning it down.

Mike: And when it comes to taxes and wealth redistribution, Bernie Sanders says "tax the millionaires billions." But in Nordic countries, who pays the majority of taxes? The middle class, because that's where the greatest number of people are. You could take away every dollar from every millionaire and billionaire, and you still couldn't sustain what they want.

American capitalism provides the means for people to excel. Even the healthcare industry employs nurses who make a good living—unlike in Cuba, where doctors make $20 a month and earn no more than a janitor. Capitalism relies on the natural human instinct to take care of yourself and your family first. And greed doesn't have to be bad; in fact, the most generous people in this world are often wealthy individuals who pay the vast majority of taxes.