The Budgetary and Fiscal Consequences of the 2020 Health Crisis

As for most of the other developed countries, the level of public’s debt in France has increased of 20 points of GDP in 2020 due to the combined public deficit of 11% and the fall of expected GDP of 10%. Since the first lockdown on 17 Th March 2020 the households have been sparing around 100 billion € confirming the RICARDO Theorem of an equivalence between the present increase in public debt and a future increase in taxation. Out of the historically five main ways of reducing public debt:default, inflation, lower spending growth or higher taxes, only taxation is currently possible in France in the next few years and it has still subtely been initiated with the reopening of the CADES fund