The fire that badly damaged Limoges’ 19th-century City Hall was set on purpose, the local prefect said. By Sunday it was under control, and France was counting the damage: more than 2,400 arrests on Saturday alone, according to authorities, nearly 1,000 police and gendarmes injured, and hundreds of businesses looted in Paris, Marseille, Lyon and other cities. Looting and fires continued Sunday night, and Prime Minister Sébastien Lecornu ordered localized curfews Monday. Interior Minister Laurent Nuñez admitted police “lost control” and offered to resign. President Emmanuel Macron refused.
America has worse inflation, as Fortune’s Jason Ma reported Monday. U.S. consumer prices rose 3.7% in the year through September, compared with France’s 3.4% on the EU-harmonized measure. What offsets it is growth. U.S. GDP rose 2.2% in the second quarter, unemployment is 4.2% and wages are growing about 3.0% a year, below inflation. Meanwhile, France expects its economy to grow just 0.5% this year, and youth unemployment there is about 20%.
Set aside growth, and the two countries have a lot in common. And Americans aren’t thrilled about where the growth is coming from. Tech investment accounts for about a third of U.S. GDP growth, according to ING. Yet, 39% of Americans now say AI does more harm than good, up from 31% a year ago, and 79% expect AI to cut U.S. jobs over the next decade, according to a Bentley-Gallup survey conducted in May. Among adults under 30, the harm figure is 47%. A Pew survey in June found 52% of Americans more concerned than excited about AI.
The same trap
Start with the debt. French public debt sits at a record 119% of GDP, while U.S. debt held by the public reached 100.2% of GDP at the end of March. Prime Minister Sébastien Lecornu’s budget, which would cut France’s deficit to 5% of GDP from 5.4%, faces its first critical vote in the National Assembly on Tuesday. Washington ran a $1.992 trillion deficit in fiscal 2026, about 6.2% of GDP based on CBO’s projections. Needless to say, that’s wider than the 5.4% deficit France is rioting over.
Bond traders are treating the two countries alike. Bank of America economists Claudio Irigoyen and Antonio Gabriel recently found that the French and U.S. 10-year yields have been moving on nearly the same track, and they say the cause is the same. “When interest rates are low, governments have incentives to run bigger deficits financed with cheap debt,” they wrote in a BofA Global Research report. “However, if that ‘cheap’ debt goes to finance a structural increase of the fiscal deficit, when interest rates increase it is politically difficult to implement the necessary fiscal consolidation to put the house in order.”
The riots are what “politically difficult” looks like. In the U.S., the warning has come through the bond market. On Sept. 8, Treasury Secretary Scott Bessent told an audience at Southern Methodist University, “I am the house now.” The bond market disagreed. Over the next three weeks, the 30-year Treasury yield climbed as high as 5.69%, levels not seen since 2002, Johns Hopkins economist Steve Hanke and former Comptroller General David Walker wrote in Fortune.
Where the anger started
France’s protests began in classrooms. In mid-September, high-school students in the Paris suburbs walked out over missing teachers, overcrowded rooms and buildings that can’t handle the heat. They blamed years of underinvestment. Teachers and unions joined, then people angry about fuel prices and the cost of living.
American schools show the same strain, and on some measures, it’s worse. Lost class time: in France, 9.8% of teaching hours in public middle and high schools went undelivered in 2024–25, mostly because absent teachers weren’t replaced, according to the Education Ministry’s statistics office. In the U.S., the GAO found that 19% of school districts canceled classes that year because of building problems, costing about 2 million students roughly 3.5 million days of learning.
Nearly half of districts had chronic facility problems that disrupted learning. Staffing: at the start of this school year, 53% of French middle and high schools were missing at least one teacher, according to a survey of 1,033 schools by SNES-FSU, France’s largest secondary teachers’ union. At the start of 2024–25, 74% of U.S. public schools had trouble filling at least one vacancy with a fully certified teacher, according to the National Center for Education Statistics. Qualifications: 11.1% of French secondary teachers aren’t fully qualified, according to the OECD. In the U.S., the Learning Policy Institute estimates 387,843 teachers aren’t fully certified for their assignments and calls that an undercount.
Nearly half of districts had chronic facility problems that disrupted learning. Staffing: at the start of this school year, 53% of French middle and high schools were missing at least one teacher, according to a survey of 1,033 schools by SNES-FSU, France’s largest secondary teachers’ union. At the start of 2024–25, 74% of U.S. public schools had trouble filling at least one vacancy with a fully certified teacher, according to the National Center for Education Statistics. Qualifications: 11.1% of French secondary teachers aren’t fully qualified, according to the OECD. In the U.S., the Learning Policy Institute estimates 387,843 teachers aren’t fully certified for their assignments and calls that an undercount.
President Trump sees another cause. “What’s happening in France is nothing less than out-of-control mass migration,” he posted on Truth Social on Oct. 6, adding that it “isn’t about schools, this is about Islam wanting to take over a once great country,” without addressing his own country’s fiscal similarities. Student demands have not mentioned immigration or religion. UBS Global Wealth Management chief economist Paul Donovan called the weekend’s violence “a different form of scapegoat economics” in a note to clients Monday.
The cushion holds as long as growth does. Market veteran Ed Yardeni argued last month that the U.S. economy is “less rate sensitive than it has ever been,” supported by wealthy retirees, large deficits and “an extraordinary AI investment boom.”
Hanke and Walker end their column with a quote from the late MIT economist Rüdiger Dornbusch: “Crises take longer to arrive than you can possibly imagine, but when they do come, they happen faster than you can possibly imagine.”
Generative AI was used for research assistance and/or transcription of this article. The reporter independently reported and verified the factual claims in this article, and a human editor reviewed it before publication.
