The prime minister of France is likely going to lose his job next week simply because he initiated a plan to balance the books. What does that even mean?
To a normal person, it means he wants the country to spend less, stop spending money it does not have, and increase tax rates so France can get a head start for the future.
You would think that sounds reasonable. So why is he being removed?
The reality is simple. Nobody wants higher taxes, and no officials, especially elected ones, want to be responsible for slowing things down. On paper, less spending means slower growth. Slower growth means weaker GDP numbers. And weak GDP looks bad on graphs.
The armed forces do not want to stagnate. They want more troops and more funding. Companies want investment, and investment only comes when there is money flowing through the economy. Every country is now in a debt race. No matter how often leaders say they want to get rid of debt, the truth is they want it. Every official wants to launch something new so they can become a contender for the history books.
We do not really need AI, but it becomes the vision when people want to change things and leave behind something bigger than themselves.
Coming back to France, boomers do not want less spending because it devalues their assets. Companies do not want it either. Asset prices need to keep rising.
People keep saying there is an AI bubble, but the real bubble is a debt bubble.
This is the core problem in developed countries. They are drowning in debt, yet nothing serious gets passed to address it. Nobody wants to increase taxes. Nobody can balance a budget.
The prime minister of France said something uncomfortable but honest. The new generation will be the victims. They will suffer the consequences of what we created. We made them believe that increasing debt is normal and necessary. All of this was done for the comfort of certain parties and boomers.
We keep driving head first into a wall, fully aware it will become a problem later, but as long as boomers stay comfortable and their assets keep rising until they die, it is tolerated.
Every disaster or downturn we have, the governments use the spending to make the previous bubble feasible.
The following image shows it all.
This is why the younger generation is far more miserable today. It used to be that middle aged people were the most miserable, but starting around 2019, research has shown that the young are now the most miserable group.
You can check out more about this research here.
