While this author's view is that the U.S. Government is operating "The Biggest Ponzi Scheme on the Planet", it is only one of many such government sponsored Ponzi schemes. I would now propose that "France Ponzi" is a leading candidate for "The Absurdest Ponzi Scheme on the Planet" based at least in part on the assertion by the Webzine "Paris Voice" that the France social security cost exceeds the French GNP.
The following paragraph was extracted from the English speaking Webzine "Paris Voice" in reference to the cost of the French social security system:
Total social security revenue is around E200 billion per year and the social security budget is higher than the gross national product (GNP), i.e. social security costs more than the value of what the country produces. Not surprisingly, social security benefits are among the highest in the EU. Total contributions per employee (too around 15 funds) average around 60 per cent of gross pay, some 60 per cent of what is paid by employers (an impediment to hiring staff). The self-employed must pay the full amount (an impediment to self-employment!) However, with the exception of sickness benefits, social security benefits aren't taxed; indeed they're deducted from your taxable income. Equally unsurprisingly, the public has been highly resistant to any change that might reduce benefits, while employers are pushing to have their contributions lowered.
The John Mauldin June 21, 2013 Newsletter provides a more detailed discussion of just how extreme the France Ponzi scheme has become.
Since the French GNP is slightly more than E2 trillion per year and the annual social security revenue is around E200 billion then, if the "Paris Voice" analysis is correct, outflows are 10X inflows making this an extreme Ponzi scheme. I find it hard to believe that this 10X ratio of outflows to inflows can possibly be correct but the reports that government expenditures approach 60% of GNP and federal taxes are 60% of a typical French worker's gross income tells me the French economy cannot sustain this level of social benefits. Also the fact that there are only 14 French workers for each 10 retirees demonstrates the unsustainablity of the French economy and that ratio of workers to retirees is continuing to decline.
The previous French president, Nichalos Sarkozy, made some progress during his term in office to reduce the social benefit costs (for example increasing the retirement age from 60 to 62 years) but much of this progress was reversed by the new Socialist president, Francois Hollande, who ran on a platform opposing the austerity measures that are required to reduce the French deficit. This is not unlike the result of the election here in the United States when such a large percentage of the electorate benefits from enhanced social benefit spending even if the government cannot possibly pay for these benefit programs. The election of Barack Obama, especially for his second term, was due in large part to the fact that a large percentage of the electorate wants the current social benefits to continue and even to increase even if these benefits are clearly unsupportable by the U.S. economy.
Next page: China Ponzi