The wrong lesson from France's budget crisis

On October 9, The Daily ran an episode called Why France Is in Crisis. The news peg was high school students marching against crumbling, understaffed public schools. The Times' Paris bureau chief, Mark Landler, used it to make a broader case.

His argument: France has lived beyond its means for about 20 years, its pension system is the core of the problem, and "this country can no longer afford its social welfare state." The episode ended by asking whether this is the end of France's welfare system.

That framing is now the default in American coverage of France. The welfare state is the problem, the bond market is the referee, and the only open question is how deep the cuts go.

It is an odd conclusion to draw from teenagers protesting because the state is spending too little on their schools. More importantly, it skips the question that should come first: what has France actually bought with its money, and how does that compare with the country American commentators implicitly hold up as the alternative?

The budget problem is real, and so is America's

France's fiscal position is tough. The government now expects a 2026 deficit of 5.4% of GDP, and public debt reached 117.5% of GDP in the first quarter.  

But the American deficit is bigger. The US closed fiscal 2026 with a deficit of about 6.2% of GDP, federal debt held by the public at 100% of GDP, and interest costs of about 3.4% of GDP. The French central state expects to pay €59.3 billion in debt service this year, roughly 2% of GDP.

The debt figures use different definitions, so the levels are not directly comparable. The direction is: both countries are running large deficits with no plan to close them.

Landler's strongest point is that the US borrows in a currency it prints, and France does not. That is true, and it is why markets punish Paris faster than Washington. But it is an argument about the euro's design, not about whether the French social model works.

The revenue side also got only a passing mention. Macron replaced the wealth tax with a narrower property tax, cut the corporate rate, cut production taxes and abolished the housing tax on primary residences. By one widely cited estimate based on Cour des comptes figures, tax cuts since 2017 cost about €60 billion and explain roughly half of the slippage in public finances.

A deficit created partly by tax cuts is now being used as proof that social spending is unaffordable.

If France is supposed to become more like the United States, it is worth checking what that would mean on the outcomes most people care about.

• Child poverty: 12.0% in France versus 21.1% in the US (OECD, 2023).
• Elderly poverty: about 23% of Americans over 66 live in relative poverty. France is one of the few OECD countries where older people are markedly less likely to be poor than the population as a whole.
• Life expectancy: 83 years in France versus 78.4 in the US.
• Health spending: $7,367 per person in France versus $14,880 in the US.
• Homicide: 1.3 per 100,000 in France versus 5.76 in the US.
• Health system performance: the Commonwealth Fund ranks the US last of 10 high-income countries; France places fifth.
• Social progress: France scores 85.07 on the 2026 Social Progress Index. The US scores 81.76, last in the G7 and 32nd in the world.

The US spends twice as much per person on health care and gets more than four fewer years of life. Its child poverty rate is nine points higher, and its homicide rate more than four times higher. These are not marginal differences.

Decommodification has worked

The sociologist Gøsta Esping-Andersen called it decommodification: the degree to which people can live a decent life without depending entirely on what they earn in the market. That is the core of the French model, and on its own terms it has delivered.

Health care. French households paid 10.2% of health spending out of pocket in 2024, against an EU average of 14.8%. That is about €292 per person per year. People with one of 32 long-term conditions, about 18% of the population, pay nothing out of pocket for that treatment.

Early childhood. School is compulsory from age 3, and enrolment of 3- and 4-year-olds is effectively universal. In the US, 54% of children that age were enrolled in 2020, against an OECD average of 82%.

Retirement. French women can expect more than 26 years of life after leaving work, and men more than 22, among the longest in the OECD. Elderly poverty is low because the pension system was designed to keep it low.

The usual American response is that France simply spends more. Public social spending is indeed just over 30% of GDP, among the highest in the OECD. But once private and tax-subsidized spending is counted, the US has the highest net total social spending in the OECD.

Americans are not spending less on health, pensions and family support. They route it through employers, insurers and tax breaks, and get worse results.

That is the real choice. It is not between a welfare state and no welfare state, but between paying for social protection publicly and universally, or privately and unevenly.

What else France bought

Set the welfare state aside, and France's political economy has still purchased something most Americans would recognize as a good life: time.

French full-time workers spend about 16.4 hours a day on leisure and personal care, among the most in the OECD. Five weeks of paid vacation are statutory; the US has no federal paid-vacation guarantee. Most of the gap in GDP per person comes from fewer hours worked (shorter years, earlier retirement, lower youth employment) rather than lower output per hour.

Economists Charles Jones and Peter Klenow built a welfare measure that converts leisure, life expectancy and inequality into consumption terms. On consumption alone, France's living standard was about 60% of America's. Counting longer lives, more leisure and lower inequality, it rose to about 92%, with each factor adding more than 10 points.

Their data are from the early 2000s, and they count all non-work time as leisure, including unemployment people did not choose. The direction still holds: GDP per person badly overstates the gap.

Happiness measures add a revealing detail. Asked to rate their lives overall, Americans score higher (6.82 versus 6.59 in the 2026 World Happiness Report). But when Alan Krueger and Daniel Kahneman measured how people felt during their actual days, French women spent more of their time in pleasant activities than American women, even though Americans were twice as likely to call themselves very satisfied.

Americans rate their lives higher. The French appear to live their days better.

What this is not

None of this is an argument that France is fine. Macron promised to modernize the economy and balance the books. Instead he cut taxes for the wealthy and for business, loosened labour law, and forced a retirement-age increase from 62 to 64 through parliament without a vote. The tax cuts widened the deficit, the pension fight erodes a key entitlement, and he leaves a fractured parliament and a far right with a real chance at power. The welfare state has also not served everyone equally: young men perceived as Black or Arab are 20 times more likely to be stopped by police, and infant mortality is twice as high for mothers born in sub-Saharan Africa. In 2023 the Conseil d'État acknowledged discriminatory identity checks, then declined to order the state to end them.  

The right question

American commentary treats France's budget as a referendum on the welfare state. The data point the other way. France delivers lower child and elderly poverty, longer lives, safer streets and more free time, on half the health spending per person, while running a smaller deficit than the US.

France does not need to become more American. It needs a revenue base that matches its commitments, and a state that builds ladders as well as it builds floors: better schools, more mobility, more jobs for the young. That is close to exactly what the students in the streets are asking for.

The question American commentators should ask is not whether France can afford its social model. It is why the US, spending as much in total, gets so much less for it.

Sources

- The Daily, "Why France Is in Crisis," October 9, 2026: [transcript (AI-generated)](https://podcasts.happyscribe.com/the-daily/why-france-is-in-crisis)
- France 2026 deficit and debt: [ING analysis](https://www.hellenicshippingnews.com/?p=1148997)
- US FY2026 deficit, debt and interest: [Committee for a Responsible Federal Budget](https://www.crfb.org/blogs/us-ran-2-trillion-deficit-last-year-we-estimate)
- French state debt service 2026: [Agence France Trésor](https://www.aft.gouv.fr/en/node/491)
- Tax cuts since 2017 and the deficit: [press review citing the Cour des comptes](https://bibliotheques-numeriques.defense.gouv.fr/impression/document/32fb775e-25b6-4c6c-a9be-a585f3faf5fd)
- Child poverty: [OECD data via Business Today](https://www.businesstoday.in/world/story/from-costa-rica-to-the-us-take-a-look-at-the-countries-where-the-highest-share-of-children-are-growing-up-poor-549046-2026-08-14)
- Elderly poverty: [OECD Pensions at a Glance 2025](https://www.oecd.org/en/publications/pensions-at-a-glance-2025_e40274c1-en/full-report/old-age-income-poverty_3cd946d7.html); [Statista (US)](https://www.statista.com/chart/amp/4101/where-is-pensioner-poverty-the-most-prevalent)
- France life expectancy and health spending: [OECD Health at a Glance 2025, France](https://www.oecd.org/en/publications/2025/11/health-at-a-glance-2025-country-notes_2f94481e/france_fc92ff53.html)
- US life expectancy and health spending: [America's Health Rankings](https://americashealthrankings.org/publications/reports/2025-annual-report/international-comparison); [Gigafact](https://gigafact.org/?p=15457)
- Homicide: [France (World Bank)](https://statisticsoftheworld.com/country/france/homicide-rate); [G7 (UNODC via Statista)](https://statista.com/statistics/1374211/g7-country-homicide-rate)
- Health system rankings: [Commonwealth Fund, Mirror, Mirror 2024](https://www.commonwealthfund.org/publications/fund-reports/2024/sep/mirror-mirror-2024)
- Social Progress Index 2026: [Social Progress Imperative](https://www.socialprogress.org/index/global/results); [G7 scores](https://www.mappr.co/social-progress-index-by-country/)
- Out-of-pocket health costs: [DREES via Journal de l'économie](https://www.journaldeleconomie.fr/?p=41068); [WHO Europe](https://www.who.int/europe/fr/news/item/22-04-2024-out-of-pocket-payments-for-health-care-are-low-in-france--but-gaps-persist-for-people-with-low-incomes--new-who-report-reveals)
- Early childhood enrolment: [NCES](https://nces.ed.gov/programs/coe/indicator/cgh); [OECD Government at a Glance 2025](https://www.oecd.org/en/publications/government-at-a-glance-2025_0efd0bcd-en/full-report/satisfaction-accessibility-responsiveness-and-quality-of-education_03b3cc45.html)
- Years after leaving work: [OECD Pensions at a Glance 2023](https://www.oecd.org/en/publications/pensions-at-a-glance-2023_678055dd-en/full-report/component-37.html)
- Social spending: [OECD](https://www.oecd.org/en/topics/social-spending.html)
- Leisure time: [OECD Better Life Index via Figure.NZ](https://figure.nz/chart/Zm0drr8mzoKOUebS-rv6TOBOhl0YpjaLh)
- GDP per person and hours: [Trésor-Economics No. 131](https://www.tresor.economie.gouv.fr/Articles/2014/06/13/tresor-economics-no-131-how-to-account-for-the-drop-off-in-france-s-per-capita-gdp-in-the-last-40-years); [Foreign Policy](https://foreignpolicy.com/?p=253486)
- Jones and Klenow: [NBER working paper](https://www.nber.org/system/files/working_papers/w16352/w16352.pdf); [Equitable Growth summary](https://equitablegrowth.org/looking-beyond-gdp-when-measuring-welfare/)
- Krueger and Kahneman, US–France comparison: [NBER](https://www.nber.org/system/files/chapters/c5059/c5059.pdf)
- World Happiness Report 2026 scores: [Atlas & Boots](https://www.atlasandboots.com/?p=12864)
- Police identity checks: [Défenseur des droits](https://www.defenseurdesdroits.fr/sites/default/files/2023-10/CP_Defenseur_des_droits_CE_Controles_Identite_Discriminatoires_RIO_20231011.pdf); [Amnesty France on the Conseil d'État ruling](https://www.amnesty.fr/actualites/controles-au-facies-le-conseil-detat-reconnait-lexistence-du-probleme-mais-refuse-de-contraindre-letat-a-y-mettre-un-terme/)
- Infant mortality: [INSEE](https://www.insee.fr/en/statistiques/8559246); [Observatoire des inégalités](https://www.inegalites.fr/mortalite-infantile-france)
- Social mobility: [OECD Ecoscope](https://oecdecoscope.blog/2019/02/27/%ef%bb%bffrance-inequality-and-the-social-elevator/); [FairPlanet (US)](https://www.fairplanet.org/editors-pick/trapped-at-the-bottom/)
- Reading scores: [PIRLS 2021 results](https://pirls2021.org/?p=6342)
- Unemployment: [INSEE](https://www.insee.fr/fr/statistiques/9032359); [Trading Economics (US)](https://tradingeconomics.com/united-states/unemployment-rate/news/589164

Research by Claude | Photo by Pierre Herman on Unsplash