Voters don’t want to hear the fiscal truth

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Brits, and not just leftwing ones, have a romantic view of political protests across the Channel. “The French don’t take things lying down!” someone will say, without knowing, much less having to live with, the extreme manifestations of that culture of dissent. (Except as background noise and scenic colour on a weekend trip to Paris.) When the government raised the pension age last spring, France saw some of the most vehement street action since 1968. The state visit of King Charles was postponed. Most presidents would have abandoned or softened the reform. This one didn’t. The result? Lasting bitterness, but also slightly more tenable public finances.

And so my Politician of the Year (in a thin field, like the 84th Oscars in 2012) is Emmanuel Macron. I can’t think of a demonstration of executive will quite like his pension project since at least Angela Merkel’s open door to refugees or even Margaret Thatcher’s confrontation with the mining unions. It is of a piece with Macron’s life, whose central theme has been the defiance of outside pressures, whether to give up his romantic partner or to work within the traditional party system of the Fifth Republic.

Western leaders need some of that bullheadedness. This column was going to argue that politicians aren’t being honest with voters about the fiscal challenge in advanced countries, where public debt is near historic highs. But that line is itself a dodge. The real issue is that voters have no stomach for the truth. In 2017, the then UK premier Theresa May asked the public to contribute more to the costs of their late-life care. She never recovered from that impertinence. In the US, Republicans have paid a bigger electoral price for questioning federal entitlements than for their ongoing embrace of the twice-impeached Donald Trump. Compare their win under his leadership in 2016 with their loss under the decent but austere Mitt Romney and Paul Ryan just four years earlier.

Raising taxes isn’t much less incendiary. Britain’s government, having done it, is on course to be smashed at the next election. (The opposition, seeing this, rules out all manner of tax rises, not just those on low or middle earners.) The gilets jaunes of Macron’s first term were upset about fuel levies, remember. If this seems like voters wanting it two ways — a welfare state but not a commensurate tax burden — the truth is worse than that. There is a third front to their (our) intransigence. Immigration, which can improve the ratio of workers to old people, and therefore the fiscal situation, is sensationally unpopular too.

This isn’t a distinguished generation of western leaders, no. But it is hard to know what even a cohort of Eisenhowers and Adenauers would do when boxed in on all sides by public opinion on the central question of government: how to fund it. The debt problem had been coming for a while, as baby boomers approached retirement, but low interest rates made it seem non-urgent. Those began to go up in late 2021. Two years on, electorates seem no readier for a frank discussion about, say, how much care the state can provide in a world where it is unremarkable that someone lives to 100.

Matthew Parris of The Times has written that Britain’s future is Argentine. That is, an unrealistic public and an overpromising political class will go around in a circle of fiscal delusion until a rich nation becomes upper-middle income. Whether that nightmare materialises — small tweaks in policy can make big differences to public debt over time — it is the first of those two culprits, the electorate, that goes under-discussed.

Think of the US. In what is meant to be a divided nation, supermajorities of voters oppose cost-saving reforms to Medicare or Social Security. During each debt-ceiling crisis, it is customary to blame the partisanship and small-mindedness of Washington. But that chaos (the Republicans toppled their congressional leader Kevin McCarthy this year over budget matters) traces back to the public, and its demands on the state. It is chivalrous, but wrong, to frame it all as a defect within the elites.

How to fix it? One ever more popular idea is a bipartisan commission to propose budget reforms. The thought is that if both parties own the policies, neither will lose votes to the other. It is sensible, but also revealing of the fear that exists of the public. And this in individualist America. Imagine the challenge in Britain, where the paternalist tradition runs deep. Or in continental Europe. After 2023, one man doesn’t have to. Western leaders should study his shattering experience, if only as preparation for their own.


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