The debate on the Social Security funding bill, that is the Social Security budget for next year, will begin when it will be presented to the National Assembly later in mid-October. We know in advance that the political-media machinery focuses on the “security hole”. The dramatization of the social accounts will lead to an extremely questionable political reading: the Social Security would spend too much and the insured would abuse their generosity, it would therefore be imperative to reduce the rate of spending.
A few perfectly decontextualized figures will allow another year of suffering for health professionals, the sick, pensioners, etc. to pass in silence. All in the name of saving social security, because his opponents never attack him in the head. They pose as their biggest advocates. It is to preserve the public hospital that governments are asking them to tighten their belts. It is to ensure the regularity of the payment of pensions that governments ask pensioners to fall into poverty.
Saying that the need for social security funding is a statistical convention or a political construct remains incomplete. Faced with the myth of the Social Security pit, described by Julien Duval, a defensive position is not enough. Despite the barrage of reforms that have overwhelmed it for decades, Social Security is in excellent financial health. Several arguments can support this judgment.
An excellent rating
The most futile but perhaps the funnest is the rating produced by the financial rating agencies. The Central Agency for Social Security Organizations (Acoss, which manages the short-term social security treasurer) and the Social Debt Amortization Fund (Cades, which manages its long-term debt) have obtained by long excellent ratings from the main rating agencies such as Fitch Ratings. or Standard & Poor’s.
Although its rating has recently been adjusted down after that of the French State, the securities issued by the Sécu are still considered among the safest available on the market. The crisis of subprime of 2008 reminded us how careful we should be with the rating agencies but, isn’t it tasty to see that they are among the most powerful actors of today’s capitalism that validate the financial health of Secu?
What other institution or company can claim to be funded in a more stable and massive way than Social Security, which relies on nothing less than the wages of the entire country?
More fundamentally, the good financial health of Social Security is explained quite simply by the fact that its income is based on wages (contributions and taxes). Of course, these revenues experience significant volatility linked to economic cycles: in a crisis situation, revenues are lower, in a growth situation, revenues are higher. But what other institution or company can claim to be funded in a more stable and massive way than Social Security, which relies on nothing less than the wages of the entire country?
Do not confuse public debt and social debt
In the race to demonize social security, the political and media debate often mixes two types of economic aggregates: public debt and social debt. Public debt is the debt of all public administrations: central administration (the State), local administrations and social administrations. The main part of the public debt consists of the State debt and not the Social Security debt (known as social debt).
At the beginning of 2022, public debt was 2.901 billion euros, or 114% of GDP. The state debt represents 79% of the total, against only 8.6% for Social Security (245 billion euros). If a public actor is in debt and suffers from “bad” management, it is much more the State than Social Security. However, their debt is relatively low compared to their income. At the beginning of the year, social security was in debt to 245 billion euros, but its income represented 552 billion euros in 2021. It is as if a person in debt for the purchase of a house could with less than six months. annual income to pay off all his debt. What a luxury!
The experience of the Covid-19 crisis certainly offers the clearest proof of the good health of Social Security. Before the pandemic, the President of the Republic warned hospital workers about the absence of “magic money” and wanted to impose a particularly unpopular pension reform. In March 2020, against all the dogmas of the budget, this same president was the protagonist not only of the maintenance but also of the expansion of the Secu.
In a context of reduction in the mass of receipts caused by the cessation of activity, public production financed by Social Security has increased: only in the case of health, rights have been extended (public health complementary for an income low), others are improved. (100% reimbursement of certain treatments, elimination of waiting days), a new remuneration has been distributed for professionals. How do you explain the change from “magic money” to “any cost”? How could all this be possible if Social Security had really been on the brink of failure as governments have been telling us for as long as we can remember?
Extraordinary vitality of the Secu
The reason is simple, we repeat: Social Security is an institution in excellent financial health. This good health is not due to the reforms that are happening but to the original principles of its operation, that is to say its support for the salary.
Social Security is in good health despite the silent mismanagement of public money, despite the politics of empty coffers, despite the government’s fight against wages, despite the crisis of capitalism…
Thus, Social Security is in good health despite the breakdown organized by governments. Social security is in good health despite the poor management of public money spent in silence: additional cost of complementary health insurance, annuities from the pharmaceutical industry, tendency to financialization, preference for debt rather than subsidies, etc.
Social security is in good health despite the policy of empty coffers, of which the so-called purchasing power law voted this summer is a telling example since it organizes the reduction of income linked to contributions. Social security is in good health despite the general fight of governments against wages (including contributions) for decades in the name of a labor policy that has never worked. Social Security is in good health despite the repetition of the crises of capitalism which, as in 2008 or 2020, are the main reasons for its financial difficulties.
Saying that Social Security is in excellent financial health is not, from a relativistic or ideological perspective, a way to oppose a “left” narrative to a “right” narrative or an “optimism” to a “pessimism.” These are the facts that prove that the financial counters of the financial end are wrong. According to them, social security has been on the edge of the abyss since its creation. And yet, she is still here! It is because social security is in excellent financial health that the government can use it as a mop on occasion to clean up the devastation caused by its action and by the dynamics of capitalism.
A new economic crisis is preparing for the fall due to the increase in energy prices. It is likely that the Secu will be called again. But, isn’t it time to take seriously the extraordinary vitality of social security and promote it to the rank of an institution to be generalized rather than a life saver?