The persistence in France of a budget deficit for over 35 years, has pushed the ratio of government debt to GDP (gross domestic product) to over 80%, up from 30% in the mid-1970s.

In early 1975, President Valéry Giscard d'Estaing abolished almost most aspects of censorship in France. Time Magazine reported that Secretary of State for Culture Michel Guy still had authority to ban anything on stage or screen that went too far. Guy, however, was more concerned about violence and drugs than explicit sex. If he had been in office at the time, Guy said he might well have banned Stanley Kubrick's chilling A Clockwork Orange, which anyone over 18 could see, while letting Last Tango in Paris sail through. Time also reported that another branch of government, however, could give the porn purveyors some anxiety. Seeking new sources of income, Finance Minister Jean-Pierre Fourcade suggested a tax on "this outburst of pornography."

France was facing a US$840m budget deficit in 1976 and every budget since has been in deficit.

This week, huge protests were held to force the government to drop plans to raise the pension age from 60 to 62.

In the current issue of the IMF's Finance and Development magazine, Kevin Cheng, Erik De Vrijer,and Irina Yakadina, write that population aging is the most deep-seated of the chronic issues confronting France. According to a study by the Organization for Economic Cooperation and Development (OECD), France’s old-age dependency ratio - - the ratio of citizens over age 65 to the working-age population - - was about 27%  in 2007. This ratio is projected to rise to 42% by 2025 and 58% by 2050.

The authors say likewise, the number of persons between ages 20 and 64 for every person over age 65 is expected to decline from 3.5 in 2010 to just 2 by 2040, increasing pressure on the current pay-as-you-go pension system. Simply put, the elderly are going to consume an increasingly large amount of France’s resources. Large-scale retirements have already begun and will likely intensify in the years to come.

The authors say it is not just demographics that cause the old-age fiscal burden. A number of features of France’s pension system are also at play. First, public transfers - - in the form of pensions and safety-net benefits - -  provide more than 85% of the income for people over age 65. This is the second highest level in OECD countries, where the average is about 60%.

Other articles in Finance and  Development -- September 2010 include:

'Restoring Hope: Reinvigorating the Millennium Development Goals' assesses how the world is doing in meeting the MDGs--international development targets that all UN member countries and many international organizations have set for 2015.

The lead article, 'Regaining Momentum,' says that while several of the MDGs are within reach, the global economic crisis has set back progress toward a number of the targets, especially those related to health. Developing countries will need the support of advanced economies in to get back on track. Economist Jagdish Bhagwati calls into question the premise of the MDGs and argues that they should be rethought. Philanthropist Melinda Gates gives the good news that maternal health has been improving, though we are not yet on track to meet the MDG target on maternal mortality.

Economists Arvind Panagariya and Rodney Ramcharan have different views on how important it is to fight inequality. This issue also examines the deterioration of fiscal positions in advanced economies--as a result of both the global financial crisis and the long-run health and pension costs of an aging population. 'How Grim a Fiscal Crisis?' argues that consolidation in advanced economies should focus on spending cuts, given the already high tax burdens in many countries.

In 'A Hidden Fiscal Crisis,' economist Laurence J. Kotlikoff examines the serious budget issues in the United States.