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Jézabel Couppey-Soubeyran: “And if we got out of inflation-debt Manichaeism? »


Iinflation and the public debt are among those subjects which, when you speak about them, suggest your political opinions. On the right, we don’t like inflation – which eats away at the real value of savings and assets – or public debt – considered the hallmark of an expensive state. On the left, we rather see in inflation a “euthanasia of pensioners” (according to the expression attributed to Keynes), useful for reducing inequalities, and in the public debt the instrument necessary to finance expenditure useful for social cohesion.

Logically, the inflation-debt combination would be a loser for the former, a winner for the latter, who even see it as something to facilitate public spending by melting the debt. What if we got out of this Manichaeism?

First, it is not certain that the rich creditors suffer more from inflation. Because everyone’s ability to redeploy their savings or reallocate their assets increases with their amount. Wealthy creditors will easily part with what no longer brings them enough to go towards supports whose remuneration compensates for inflation.

On the other hand, the modest holder of a Livret A will stop there and will see the real value of his savings decrease if the rate of his booklet does not follow that of inflation. In this case, the French Livret A rate, although raised to 3% in February 2023 (its highest level since 2008), does not compensate for the level of inflation still close to 6% in the spring of 2023: its real rate is therefore negative.

Unequal distributive effects

Inflation therefore more surely kills small savers than rich pensioners. John Maynard Keynes (1883-1946) himself deplored the unequal distributive effects of inflation, fearing that it would hurt the most modest among savers, but also among employees when they did not obtain a compensatory increase. of their salary.

Admittedly, inflation has indeed caused a rise in nominal wages, but with a lag in relation to inflation (except in the United States), and not in a unitary way: only the minimum wage is indexed to inflation, and the capacity wage bargaining remains low for the lowest paid. And when the rise in prices remains carried, as it is currently, by those of energy and especially food raw materials, it weighs more heavily in the basket of low-income households. Also play, within each income category, age and area of ​​residencewith the oldest and furthest from major cities proving to be the most exposed.

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