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If Only We Were Swedenizing: Scandinavia Reforms While America Stagnates
National Review ^ | 02/12/2013 | James Pethokoukis

Posted on 02/11/2013 8:22:42 AM PST by SeekAndFind

In President Barack Obama’s Election Night and inaugural speeches, he made it clear there would be no centrist pivot in his second term. Forward, 51 percent of my fellow Americans, to a more egalitarian, tolerant, and communal future!

The president’s State of the Union speech on Tuesday will likely flesh out that vision as it applies to the federal budget, income inequality, and the environment. The era of Big and Getting Bigger Government is here to stay, he’ll surely admit. Higher taxes on the rich and business will be presented as a small price to pay for an expanded safety net and greater economic security. Don’t worry, middle-class Americans, the “dad of the country” — to use comedian Chris Rock’s recent description — will make it all better.

Given all that, it seems like good news that The Economist has just published a paean to Nordic-style, cozy capitalism, calling the Viking on its February 2 cover “The Next Supermodel.” After all, isn’t that what Father Obama is hell bent on accomplishing, the Swedenization of America with a supersized welfare state, confiscatory taxes, and greater income equality? The next thing you know, Michelle will be hiring Ikea to remodel the Oval Office. Out with the stuffy Resolute desk, in with the clean, modern lines of the Vika Gruvan model.

We should be so lucky. While America is moving left, Scandinavia is moving right. As The Economist points out, Scandinavia’s socialist image is badly out of date. Sweden is the largest of the Nordics and perhaps the best example of their embrace of market capitalism. Over the past 20 years, Sweden’s public spending has declined from three-quarters of GDP to just over half. Its corporate tax rate is half of America’s, its annual deficit a rounding error of just 0.3 percent of GDP.

Late last year, the pro-free-enterprise Legatum Institute published its annual Prosperity Index, ranking major national economies on eight “foundations” of success, including economic fundamentals, entrepreneurship and opportunity, and governance. The top three finishers were Norway, Denmark, and Sweden, with Finland in seventh. And the U.S.? It finished twelfth, outside of the top ten for the first time. Legatum’s damning assessment: “[America’s] biggest fall is in entrepreneurship and opportunity, which has declined eight places in the last four years. Businesses’ start-up costs are rising in the land of pioneers and patents. Fewer Americans believe that working hard will get them ahead.”

Scandinavia still taxes and spends too much. But it is able to offset those disadvantages partially with efficient, honest, and transparent government. Both cultural homogeneity and history have created a high level of social trust, The Economist explains, which means “high-quality people join the civil service. Citizens pay their taxes and play by the rules. Government decisions are widely accepted.” In its economic-freedom index, the Heritage Foundation praises the Swedish economy for its “regulatory efficiency [and] open-market policies that sustain flexibility, competitiveness, and large flows of trade and investment.” Of Denmark, Heritage says, “The overall regulatory environment, transparent and efficient, encourages entrepreneurial activity.”

The Nordics have had one other big advantage, at least up until now: an America that innovates for the world’s benefit. It doesn’t matter so much whether your own country is innovative, so long as it is open to importing and adopting new ideas, inventions, and processes created elsewhere (as well as the “creative destruction” such innovation brings), which the Nordics are. But someone somewhere needs to push the technological frontier. Economists Daron Acemoğlu, James Robinson, and Thierry Verdier suggest countries “may want to be like the Nordics with a more extensive safety net and a more egalitarian structure . . . [but] it may be precisely the more cut-throat American society, with its extant inequalities, that makes possible the existence of more cuddly Nordic societies.” If America were “to switch to such cuddly capitalism, this would reduce the growth rate of the entire world economy.”

This possibility has probably never entered the president’s mind. If it had, he might have, say, not raised investment-tax rates by 60 percent as he did from 2012 to 2013. The worst-case outcome is an America that gets a more Nordic-sized welfare state and tax burden, keeps its current inefficient, dysfunctional government, and loses its innovative edge. That is a recipe for, in turn, stagnation, crisis, and decline. Under Obamanomics, America is more likely on path toward Italy or Greece than Sweden or Denmark.

— James Pethokoukis, a columnist, blogs for the American Enterprise Institute.

TOPICS: Business/Economy; Constitution/Conservatism; Foreign Affairs; News/Current Events
KEYWORDS: scandinavia; socialism; sweden; welfare

1 posted on 02/11/2013 8:22:49 AM PST by SeekAndFind
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To: SeekAndFind


The Swedish Model: Government Austerity


Around 1993, Sweden’s government changed its behavior: it started spending less. By 2011 it was spending “only” 49% of GDP. While that is still pretty high, that represents a cut of 19% of GDP, or about what the entire federal government of the U.S. spent each year in most of the Clinton and Bush years.

By 1998, Sweden was no longer Europe’s biggest spender. By 2011, it had dropped to 9th place of 34 advanced economies.

Sweden’s government is still big, but not near the biggest, and it lost a lot of weight — the equivalent of shedding the weight of the entire federal government of the U.S.

That is what I call “austerity”: the government simply spending less. And how did that work out for Sweden? Since 1993, its economy grew 2.8% per year, or double its previous rate, while ours grew only 2.5% per year. Its debt was cut from a high of 73% of GDP to 37%.

2 posted on 02/11/2013 8:24:27 AM PST by SeekAndFind
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To: SeekAndFind
Both cultural homogeneity and history have created a high level of social trust,

Not if they keep importing Muslims.

3 posted on 02/11/2013 8:24:27 AM PST by dfwgator
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To: dfwgator
Setting aside Muslim immigrants, here is the Swedish ECONOMIC story in two charts:

I don't know how it could be any clearer: austerity, properly understood, works. Of course, if they included CORRECT immigration policies, it would work even better.
4 posted on 02/11/2013 8:26:32 AM PST by SeekAndFind
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To: SeekAndFind

Umm Yeah, about that Muslim thing ......

5 posted on 02/11/2013 8:31:30 AM PST by SkyDancer (Live your life in such a way that the Westboro church will want to picket your funeral.)
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To: SeekAndFind

The Nordic countries The next supermodel
Feb 2nd 2013

6 posted on 02/11/2013 8:44:45 AM PST by beaversmom
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To: beaversmom
RE:The Nordic countries The next supermodel

Did you say Supermodel?

7 posted on 02/11/2013 8:53:05 AM PST by SeekAndFind
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To: SeekAndFind

Um...well, not really what I had in mind. :)

8 posted on 02/11/2013 8:58:42 AM PST by beaversmom
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To: SeekAndFind

The era of Big and Getting Bigger Government is here to stay.
You get what you vote for stagnation.

9 posted on 02/11/2013 9:16:49 AM PST by Vaduz
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To: SeekAndFind
What conservatives and libertarians fail at in their messages like this one is that anyone who has watched a Swedish TV show or movie, thinks "Gee they have a pretty good life and nobody seems to struggle too much." Then the conservative says "Beware of that life." but the images don't match, the terrible prospects presented to the less than serious reader.

Try something like this instead - "Democrats want ethanol in gasoline, since we started adding it, the cost of gas has gone up a dollar a gallon and the price of your corn flakes and pancake flour is up too." NOW THE SAME STORY COULD BE TOLD ABOUT wind energy, MTBE ( required by democrats...causing polution in the water.) Spotted owls destroying lumber mills in Oregan and raising home prices. etc etc. Tiemn to get real stories with real consqueces the working man or woman can see for themselves every time they pump gas or go to the store.

10 posted on 02/11/2013 9:32:36 AM PST by q_an_a (the more laws the less justice)
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To: SeekAndFind

And don’t forget the disease of mutliculturalism that the Swedish government has inflicted upon its citizenery.

Which country has the highest Rape Rate in the World?

After thinking over the question for five minutes, you might come up with South Africa or some other third world country as your answer. However, the real answer might shock you.

Who has the highest number of rapes in the world?

The title sadly goes to Sweden, which now sees one out of every four Swedish women being the victim of rape.

Is this the result of the rapid influx of Muslim immigrants who continue to form a larger percentage of the Swedish population?

From the Counter Jihad Report:

With Muslims represented in as many as 77 percent of the rape cases and a major increase in rape cases paralleling a major increase in Muslim immigration, the wages of Muslim immigration are proving to be a sexual assault epidemic by a misogynistic ideology.

The escalation of rape in Sweden is so bad that in July of last year there were an average of five rapes a day reported in Stockholm. Think about that for a minute; five women being raped a day in a modern civilized city. This isn’t Afghanistan or Mexico we’re talking about; it’s Sweden.

The fact that the quantity of rapes is increasing due to the increase of Muslim immigrants is in itself disturbing. As of 2008, Sweden’s rape statistics were up to 53.2 per 100,000 population. Sadly, they are most likely higher as the Muslim population continues to grow without any willingness to assimilate into Swedish society.

The only way to fix such a problem is either halt immigration altogether, or to bring down the law on Muslim immigrants who are unwilling to obey. However, such actions force Swedish officials to recognize the root of the problem - Islam. And we all know how government officials react to that.

Read more:

11 posted on 02/11/2013 9:36:39 AM PST by CharlesMartelsGhost
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To: CharlesMartelsGhost

The cure for muslim influence is more drilling in North America, and maybe even in Europe. It is a paradox that Saudi Arabia, which has the least progressive culture in the world, enjoys such respect from Europe. But all one needs to look at a map and see the massive flow of oil from the Persian Gulf to the ports of Europe. Not for nothing did the Europeans begin to turn against Israel after the Oil Embargo.

12 posted on 02/11/2013 10:51:21 AM PST by RobbyS (Christus rex.)
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