lthe Anglo-Saxon business press, Wall Street Journal has The economistThe Democratic candidate Harris-Walz is criticising the programme to combat the high cost of living, the cornerstone of her economic project ahead of the US presidential elections. Two measures in particular are drawing criticism. Two measures that are already in force… in France!
The first is a subsidy of up to $25,000 (22,600 euros) for first-time homeowners subject to a means test. According to its detractors, this measure would be a drain on public finances and would encourage property inflation: developers and sellers would thus benefit. In economic terms, such a system is equivalent to the French zero-rate loan (PTZ). This, however, is not quite the same: it does not concern only first purchases, it is reserved for stressed areas and is limited to new products. In fact, a 40,000 euro loan for twenty years at 0% allows savings of 20,000 euros compared to current rates. The cost to public finances is expected to reach one billion euros by 2024.
Created in 1995 by the Juppé government (Michel Barnier was a member), the PTZ has undergone multiple reforms, without ever disappearing. However, the evaluation work has shown its limits. The vast majority (up to 85%) of beneficiaries would still have acquired property. A significant part of the subsidy would be absorbed by developers, who increase prices. What is most worrying is that access to property with a PTZ was, for many households, “at the cost of geographical distance from city centres and increased social segregation” (“The peri-urbanization of poverty: policy of support for property and socio-spatial inequalities in France”, Laurent Gobillon, Anne Lambert and Sandra Pellet, Population northoh 77/1, 2022). A 2019 financial inspection report, now buried, recommended not renewing the PTZ. However, these shortcomings are little reported by the French economic press, which, on the other hand, echoes the “Fears for employment” construction lobby with every threat to the sustainability of the PTZ.
great gift
Kamala Harris’s second measure takes up a proposal by… Donald Trump: reduction of the federal tax on tips. Mr. Trump has aroused the interest of millions of employees, in particular those, very numerous, of a state of oscillation-Keyword: Nevada and its “casino economy”. Since mme Harris also supports this measure, but criticism has grown stronger: it would be costly, unequal because it is reserved for a segment of the population, unfair within a single company – only those who are in contact with the public are entitled to it – and it shows that the Democrats are participating in the electoral populism of which they accuse their opponent.
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