Name: Why France is Preparing To Crash The US Economy
Uploaded: 2026-02-18T18:21:52.000Z
Duration: 9 min 37 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Adverbs of manner

French economy is on the brink of catastrophe and it's preparing to take down with it the rest of the global economy, especially the United States.

Transition words & phrases

France is mathematically headed into bankruptcy because over the last 25 years, France did everything possible to destroy its own economy.

Basic passive voice

So if it's not going to take drastic measures today, France is done.

And it's going to trigger the 2008 style financial crisis that is going to wipe out the US Economy.

In this video, I will show you exactly what what is wrong with the French economy and why the United States should be worried.

The French government has one of the largest welfare programs in the world.

In total, the government will spend this year about 1.7 trillion euros.

And 90% of those spendings are going to be mandatory, such as pensions, health care and the military.

So the French government cannot easily cut these spendings.

And that is the vast majority of the spending by the government.

The the other 10% of the spendings are discretionary, such as the infrastructure projects.

And that's why France doesn't actually build massive infrastructure projects, because that is the only place where the French government can save some money.

If you actually want to solve the debt problem, you should start cutting healthcare spending and pensions.

If you are working for the French government, there is no way the government is going to fire you unless there's like a good reason to do so.

Which means that the French government is huge and it spends a lot of money to maintain so many civil servants.

And at the same time, it can't possibly cut 90% of its spendings.

And here's what really destroyed the French economy over the last 25 years.

Every single time the French economy faced a crisis, such as in 2008 or the pandemic of 2020, the government should have actually taken measures to cut spending to be able to pay those debts.

When you are in cr, the first thing you would do is that you would borrow money.

And because interest rates over the last 25 years has been ultra low, French politicians, instead of actually changing the laws and cutting healthcare spendings, pension spendings or the military spendings, they avoided the legal problems and simply borrowed money to close the budget gap.

But as they say, there is no such thing as a free lunch.

If you borrowed money, you have to pay that money back.

And when you solve every single problem that you have with a credit card, your entire debt is going to balloon just like in the case of France, when The debt to GDP ratio has increased from 60% to 120% over the last 25 years.

And here is the problem with the French debt.

The French economy grows by 1% while interest payments on the French debt is 2.5%.

So interest payments are growing 2.5 times faster than the size of the French GDP.

You don't have to be a genius to understand that when your debt is growing two and a half times times faster than your income, it is going to be a lot more difficult to pay that debt.

And here's what makes the situation a lot worse.

Inflation will keep increasing mandatory spending.

Since you cannot possibly change your mandatory spending, which is 90% of your entire spending every single year there is inflation.

So you have to increase the pensions and you have to spend more on maintaining the exact same healthcare.

The total French debt is about $4 trillion.

And 25% of that is owned by the French Central Bank.

The French Central bank is part of the European Central Bank.

Because France uses euro as its currency.

15% of the French debt is owned by the French pensions and just 7% by French banks and French citizens.

Seems like French people don't have much faith in their own government because they don't even invest in their own local government.

53% of the French debt is owned by foreign investors.

So it's not being owned by the French people, but rather investors who are outside of France.

And when foreign investors look at your debt and they realize that it is a problem, they invested in your debt because they want to make money.

The moment there is something wrong with your country, with your economy, and

they start believing that France is not going to be able to pay back its debts, what do you think they are going to do?

They will instantly start selling their debts.

And that is the biggest threat that France is facing facing right now.

And unlike the United States that has the world's largest debt, 75% of the US debt is owned by the US citizens.

If America runs into a problem where it won't be able to pay back its debts, the Federal Reserve can simply intervene and do massive quantitative easing and start massively buying all of that debt in the open market.

But that's not an option that France has because France does not have control over its own local currency.

France uses the euro, a currency that is being used by another 20 other nations in the European Union.

So if you want the European Central bank to buy your currency, then you need the approval of other European countries.

Do you think Germans, Italians, Greek and other 20 other nations are simply going to allow the European Central bank to buy trillions of dollars of French debt that is going to cause inflation across the entire European Union?

So do you think they want to subsidize the French pensions?

Do you think other European countries want to subsidize the French healthcare?

That is not an option that is on the table, but

that's an option that countries such as the United States has or Japan.

Japan has a debt that is twice bigger than the French debt, but

it's not a problem because 88% of that debt is being owned by the Japanese Central Bank.

The Japanese Central bank is part of the government in Japan.

So it's not going to simply sell that debt.

And it's not there to make a profit out of the government of Japan.

It is there to stabilize the Japanese economy.

First of all, it can simply cut spending, but that is going to cause social unrest.

Do you think there is a French politician that is going to say that, listen guys, our predecessors completely screwed our economy and it's time to pay back our debts.

So we are going to cut the pensions by 20%, we are going to cut healthcare by 50% in the next five to 10 years.

I think that kind of news is going to create a civil war in France.

Because if there is even a slightly political instability in France, sudden see thousands of people marching in the streets, literally just breaking everything in the streets, that kind of news is going to wipe out and will create huge social unrest.

That's why I don't think there is like a French politician that can take that responsibility.

The second solution is to default on your loan.

You will basically tell investors, listen, I don't have money, I can't pay you back.

But that's also not an option that France can take because France issues its debt in euro, since it uses the euro.

And if it's going to default on a European bonds, then all other European bonds across all other European countries are going to lose credibility.

So investors won't simply just sell the French debt, but

rather they will start selling all other bonds that are denominated in Euro.

That is basically going to be a suicide for euro.

And if Euro is going to default, that could potentially put an end to the European Union.

But why is that a problem to the United States?

The French debt mostly is being owned by European countries, Middle Eastern countries and Asian countries.

Almost all of that debt is being insured by American banks such as Goldman Sachs, JP Morgan, Citi.

So if France is going to default on its loans, American banks suddenly will have to pay trillions of dollars to other European countries and Middle Eastern countries who used to invest in the French debt.

It can easily bankrupt a lot of American banks.

And the exact same thing that happened back in 2008.

If you go back to 2008, it was a housing crisis.

But why did the government suddenly bail out the American banks?

The reality is that American banks sold insurance on houses because they thought that house prices are never going to collapse.

But the moment house prices collapsed, suddenly American banks, who sold so many derivatives, so many insurances on houses, found themselves making trillions of dollars in losses.

Which is why the American government had to step in and bail out the American banks.