As France Looks To Turn Page On Recession With New Budget, Economists Say Not So Fast
“I think Brian’s done a good job. I work with him. Sometimes he listens. He doesn’t listen all the time. We debate issues sometimes. I’m proud to say sometimes I win. I’d like to win all the time,” said Bruton Smith, owner of Speedway Motorsports Inc. and the late Bill France Jr.’s biggest adversary. “But I don’t. We’ll continue to go down the road with him.” In this case, Waltrip said MWR co-owner Rob Kauffman had a dialogue with France, but it didn’t make a difference. “They were pretty well set on their decision, and we elected to accept the penalties and try to move forward,” Waltrip said. It’s impossible for France to not have similarities to his father, who had zero tolerance for anyone who messed with his show. “In our family, the way everything works, you grow up around the dinner table, so he was getting a pretty good education from Bill when he was very young,” said Jim France, Bill’s brother and the current executive vice president of NASCAR. But Brian’s vision often differed from his father’s in that France thought bigger and broader from an early age.
But much of the criticism of the budget was that it is in fact likely to hurt household spending. Though the government argues the budget provides relief for lower income households, economists note that the tax credit meant to boost hiring at companies is being paid for largely by a hike to the sales tax. That directly takes money out of the pockets of shoppers of all incomes. In terms of reducing the deficit, the budget appears to be Paris belated effort to fall in line with the rest of Europes focus on cutting public spending, which makes up 57 percent of gross domestic product. The slow approach is typical of Francois Hollandes tenure. The French president is famous for trying not to be famous. His most notable domestic policy so far, the creation of a 75 percent income tax, was rejected by a court and amended so many times that it lost much of its shock value. His reforms have been painstakingly negotiated and have often lost much of their punch by the time they are announced. Such delays have drawn a critical eye from the European Commission, the executive arm of the European Union, and Germany, which led the push for austerity in Europe. While the Commission has softened its stance somewhat notably giving France more time to reduce its deficit the re-election of German Chancellor Angela Merkel this weekend was an endorsement of her tough line. But the new budget is also coming under fire in some quarters for cutting too much since cuts will hurt growth in the short term, just as the country is emerging from recession and with unemployment at 11 percent. Eric Heyer, an economist with the French Observatory for Economic Forecasts, says the budget is moving in the right direction, but that spending cuts are still not advisable since the economy is still in trouble. He estimates that spending cuts and tax increases both in France and around Europe will shave 1.3 percent off Frances growth next year. Still, the observatorys forecast is among the most positive at a 1.3 percent increase in GDP.