Welfare State, Gendarme State, public debt, public deficit, Keynesian theories, social democratic ideas, Adam Smith, state intervention, economic stability, financial stability
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This document compares the welfare state and gendarme state models, discussing their characteristics, roles, and challenges related to public debt and deficit.
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[...] Firstly, the welfare state plays a regulatory role by acting directly on economic activity. It aims to stabilize the global level of demand, reduce fluctuations in the cycle, and ensure full employment. This is achieved through an active budgetary and monetary policy. The state also adopts a redistributive function through its tax system and social spending. It realizes income transfers between households through social levies and social benefits, thus ensuring a form of solidarity, reducing inequalities, and protecting against the uncertainties of life. [...]
[...] This increases the cost of credit for the state and undermines its long-term solvency. Beyond a certain threshold, the debt burden can become unsustainable and threaten financial stability. Proposal for measures: We have chosen the welfare state model because it is the model in force in France since the end of World War II. In the face of recent economic and health crises (e.g. Covid-19), a high level of public intervention in the economic, social, and health sectors is necessary to support household purchasing power, business activity, and preserve access to essential services for all. [...]
[...] InDictionary of Public Administration (pp. 209-210). Presses universitaires de Grenoble. Merrien, F. X. (2013).The Welfare State. WHAT DO I KNOW. Petit, É. (2019). Sheet 33. The Public Deficit.Full Right, 285-292. Timbeau, X. (2022). Is Public Debt Still Sustainable?Financial Economics Review, 165-184. [...]
[...] The state thus fulfills only royal functions. Its mode of financing relies essentially on indirect taxes such as customs duties, in order to limit direct taxation considered detrimental to property. Taxation only serves to cover strictly royal expenses. After the traumas of the two world wars and the economic crisis of 1929, the model of the gendarme state reaches its limits. The massive disturbances caused call into question the idea of a spontaneous return to full employment through the sole play of the market. [...]
[...] Improvement of competitiveness and productivity in the long term. Improve the healthcare system by promoting prevention, reducing reliance on ineffective care, and developing outpatient care. Mastering healthcare expenses while preserving access to care for all. Reform the pension system to ensure its long-term financial viability, for example by gradually aligning the retirement age with life expectancy. Guarantee the sustainable financing of the pension system while preserving the level of pensions. Sources Ewald, F. (1986).History of the Welfare State: The Origins of Solidarity. Mathieu, M. (2014). State-Gendarme. [...]
