Fox Wolf Capital

David Friedberg: France’s Crisis Is a Warning for America “France is a bellwether for the West. So take a look at this chart. This chart is a measure of public spending as a percent of GDP. And you can see the comparison of France's public spending as a % of GDP to the peak public spending as a % of GDP of major communist nations.” @Chamath: “So do you think France is a communist state? They spend like it.” @Jason: “Well, it's certainly been a socialist state, right?” Chamath: “Is it working?” @Friedberg: “That's my point. And I think this is such a prescient lesson for the West to look at. We all think that there's some political problem with Macron or whoever it was. The more the government spends, the worse the conditions get for its people, not the opposite, and then the people riot and revolt. Take a guess where the US is today. US public spending is roughly 36% of GDP. France today is operating its national government spending deficit is 5.4% of GDP. The US is actually 6.2% of GDP. France is, I think, probably the first to go because they're only growing their economy at half a percent while the US is growing at 2.3%. So we're still kind of hanging on because we have some degree of economic growth that's allowing us to kind of hold things together. But I would argue that we are facing the same sort of fiscal cliff which leads to this extraordinary social unrest as France. All the economic measures are aligned, we're at the same rate, we're at the same set of problems, and we're starting to see the cracks in the system. There's probably a multi-year solution.”