Sweden: textbook case of why Obamanomics failed

[Wiseacre]

Sweden is today one of the world's economic success stories; but that wasn't always the case, in the 70s and 80s they doubled their overall tax burden, socialized a bunch of industries, increased regulations over it's markets, expanded it's public systems, and shuttered it's borders. The result? Economic stagnation, high UE, and a fast rising public debt; and by 1990 real wages only increased by 1% over those 20 years - bigger gov't did not turn out to be the answer. Remember ABBA, Bjorn Borg, Ingmar Berman? Famous and wealthy Swedes, they and others left home for more friendly financial climes.

So, in the 90s they cut taxes, de-regulated their markets, and went to a sound money, low inflation monetary policy. They divested themselves of the aforementioned industries, granted independence to it's central bank, and introduced a school voucher system that improved choice and competition in education. They cut the public pension system and introduced private pension programs; UE benefits, sick leave, and early retirement benefits were all streamlined to encourage work. The result: fewer people on the public dole, which is a big reason for their sound financial situation today. Another reason: they partially privatized their Social Security system.

In 2006, they cut property taxes, even for the rich guys. In 2005, they abolished inheritance taxes. Both policies were done to encourage entrepeneurs to come to Sweden to create new businesses or expand existing ones. Private providers were allowed to enter the healthcare market, thereby introducing competition into what was a very socialistic medical system (single payer). Same thing for the utilities and agriculture industries, prices are now determined by market forces without gov't intrusion.

So, what happened? Sweden started running surpluses instead of deficits. Their gross public debt dropped from 78% in 1994 to 35% in 2010, and they weathered the Great Recession a lot better than we did, in 2010 their growth rate was 5.5% but ours was 2.7%.

They still have an unemployment problem, pretty much like everyone else. Some say that is due at least in part to a high minimum wage imposed by the powerful Swedish unions; Sweden has not been able to do much to reform labor laws, as Germany did 10 years ago. There's no doubt the US is a far larger economy, and what worked for Sweden then may not work for us now. But IMHO, what we've been trying so far under Obama has not worked very well; it's time to change course and try some alternative approaches.
The American Spectator : Free Market Sweden, Social Democratic America

 

[Listening]

Could we put this in the economics forum ?

I'd prefer to not have people like Franco litter it with his cat turds.

 

[NYcarbineer]

Sweden is today one of the world's economic success stories; but that wasn't always the case, in the 70s and 80s they doubled their overall tax burden, socialized a bunch of industries, increased regulations over it's markets, expanded it's public systems, and shuttered it's borders. The result? Economic stagnation, high UE, and a fast rising public debt; and by 1990 real wages only increased by 1% over those 20 years - bigger gov't did not turn out to be the answer. Remember ABBA, Bjorn Borg, Ingmar Berman? Famous and wealthy Swedes, they and others left home for more friendly financial climes.

So, in the 90s they cut taxes, de-regulated their markets, and went to a sound money, low inflation monetary policy. They divested themselves of the aforementioned industries, granted independence to it's central bank, and introduced a school voucher system that improved choice and competition in education. They cut the public pension system and introduced private pension programs; UE benefits, sick leave, and early retirement benefits were all streamlined to encourage work. The result: fewer people on the public dole, which is a big reason for their sound financial situation today. Another reason: they partially privatized their Social Security system.

In 2006, they cut property taxes, even for the rich guys. In 2005, they abolished inheritance taxes. Both policies were done to encourage entrepeneurs to come to Sweden to create new businesses or expand existing ones. Private providers were allowed to enter the healthcare market, thereby introducing competition into what was a very socialistic medical system (single payer). Same thing for the utilities and agriculture industries, prices are now determined by market forces without gov't intrusion.

So, what happened? Sweden started running surpluses instead of deficits. Their gross public debt dropped from 78% in 1994 to 35% in 2010, and they weathered the Great Recession a lot better than we did, in 2010 their growth rate was 5.5% but ours was 2.7%.

They still have an unemployment problem, pretty much like everyone else. Some say that is due at least in part to a high minimum wage imposed by the powerful Swedish unions; Sweden has not been able to do much to reform labor laws, as Germany did 10 years ago. There's no doubt the US is a far larger economy, and what worked for Sweden then may not work for us now. But IMHO, what we've been trying so far under Obama has not worked very well; it's time to change course and try some alternative approaches.
The American Spectator : Free Market Sweden, Social Democratic America

So your formula is to bring our country's level of socialism up to the Swedish level?

That's our path to success?

lol

 

[Joshuatree]

Sweden is today one of the world's economic success stories; but that wasn't always the case, in the 70s and 80s they doubled their overall tax burden, socialized a bunch of industries, increased regulations over it's markets, expanded it's public systems, and shuttered it's borders. The result? Economic stagnation, high UE, and a fast rising public debt; and by 1990 real wages only increased by 1% over those 20 years - bigger gov't did not turn out to be the answer. Remember ABBA, Bjorn Borg, Ingmar Berman? Famous and wealthy Swedes, they and others left home for more friendly financial climes.

So, in the 90s they cut taxes, de-regulated their markets, and went to a sound money, low inflation monetary policy. They divested themselves of the aforementioned industries, granted independence to it's central bank, and introduced a school voucher system that improved choice and competition in education. They cut the public pension system and introduced private pension programs; UE benefits, sick leave, and early retirement benefits were all streamlined to encourage work. The result: fewer people on the public dole, which is a big reason for their sound financial situation today. Another reason: they partially privatized their Social Security system.

In 2006, they cut property taxes, even for the rich guys. In 2005, they abolished inheritance taxes. Both policies were done to encourage entrepeneurs to come to Sweden to create new businesses or expand existing ones. Private providers were allowed to enter the healthcare market, thereby introducing competition into what was a very socialistic medical system (single payer). Same thing for the utilities and agriculture industries, prices are now determined by market forces without gov't intrusion.

So, what happened? Sweden started running surpluses instead of deficits. Their gross public debt dropped from 78% in 1994 to 35% in 2010, and they weathered the Great Recession a lot better than we did, in 2010 their growth rate was 5.5% but ours was 2.7%.

They still have an unemployment problem, pretty much like everyone else. Some say that is due at least in part to a high minimum wage imposed by the powerful Swedish unions; Sweden has not been able to do much to reform labor laws, as Germany did 10 years ago. There's no doubt the US is a far larger economy, and what worked for Sweden then may not work for us now. But IMHO, what we've been trying so far under Obama has not worked very well; it's time to change course and try some alternative approaches.
The American Spectator : Free Market Sweden, Social Democratic America

So your formula is to bring our country's level of socialism up to the Swedish level?

That's our path to success?

lol

How do you know that Sweden today has more socialism than the US under Hussein Obama?

 

[LoneLaugher]

I agree. Textbook.

Sweden Tax Rates

 

[buckeye45_73]

Sweden is today one of the world's economic success stories; but that wasn't always the case, in the 70s and 80s they doubled their overall tax burden, socialized a bunch of industries, increased regulations over it's markets, expanded it's public systems, and shuttered it's borders. The result? Economic stagnation, high UE, and a fast rising public debt; and by 1990 real wages only increased by 1% over those 20 years - bigger gov't did not turn out to be the answer. Remember ABBA, Bjorn Borg, Ingmar Berman? Famous and wealthy Swedes, they and others left home for more friendly financial climes.

So, in the 90s they cut taxes, de-regulated their markets, and went to a sound money, low inflation monetary policy. They divested themselves of the aforementioned industries, granted independence to it's central bank, and introduced a school voucher system that improved choice and competition in education. They cut the public pension system and introduced private pension programs; UE benefits, sick leave, and early retirement benefits were all streamlined to encourage work. The result: fewer people on the public dole, which is a big reason for their sound financial situation today. Another reason: they partially privatized their Social Security system.

In 2006, they cut property taxes, even for the rich guys. In 2005, they abolished inheritance taxes. Both policies were done to encourage entrepeneurs to come to Sweden to create new businesses or expand existing ones. Private providers were allowed to enter the healthcare market, thereby introducing competition into what was a very socialistic medical system (single payer). Same thing for the utilities and agriculture industries, prices are now determined by market forces without gov't intrusion.

So, what happened? Sweden started running surpluses instead of deficits. Their gross public debt dropped from 78% in 1994 to 35% in 2010, and they weathered the Great Recession a lot better than we did, in 2010 their growth rate was 5.5% but ours was 2.7%.

They still have an unemployment problem, pretty much like everyone else. Some say that is due at least in part to a high minimum wage imposed by the powerful Swedish unions; Sweden has not been able to do much to reform labor laws, as Germany did 10 years ago. There's no doubt the US is a far larger economy, and what worked for Sweden then may not work for us now. But IMHO, what we've been trying so far under Obama has not worked very well; it's time to change course and try some alternative approaches.
The American Spectator : Free Market Sweden, Social Democratic America

So your formula is to bring our country's level of socialism up to the Swedish level?

That's our path to success?

lol

Well well, so your admitting there are limits to socialism? That's a start.

 

[Wiseacre]

Sweden is today one of the world's economic success stories; but that wasn't always the case, in the 70s and 80s they doubled their overall tax burden, socialized a bunch of industries, increased regulations over it's markets, expanded it's public systems, and shuttered it's borders. The result? Economic stagnation, high UE, and a fast rising public debt; and by 1990 real wages only increased by 1% over those 20 years - bigger gov't did not turn out to be the answer. Remember ABBA, Bjorn Borg, Ingmar Berman? Famous and wealthy Swedes, they and others left home for more friendly financial climes.

So, in the 90s they cut taxes, de-regulated their markets, and went to a sound money, low inflation monetary policy. They divested themselves of the aforementioned industries, granted independence to it's central bank, and introduced a school voucher system that improved choice and competition in education. They cut the public pension system and introduced private pension programs; UE benefits, sick leave, and early retirement benefits were all streamlined to encourage work. The result: fewer people on the public dole, which is a big reason for their sound financial situation today. Another reason: they partially privatized their Social Security system.

In 2006, they cut property taxes, even for the rich guys. In 2005, they abolished inheritance taxes. Both policies were done to encourage entrepeneurs to come to Sweden to create new businesses or expand existing ones. Private providers were allowed to enter the healthcare market, thereby introducing competition into what was a very socialistic medical system (single payer). Same thing for the utilities and agriculture industries, prices are now determined by market forces without gov't intrusion.

So, what happened? Sweden started running surpluses instead of deficits. Their gross public debt dropped from 78% in 1994 to 35% in 2010, and they weathered the Great Recession a lot better than we did, in 2010 their growth rate was 5.5% but ours was 2.7%.

They still have an unemployment problem, pretty much like everyone else. Some say that is due at least in part to a high minimum wage imposed by the powerful Swedish unions; Sweden has not been able to do much to reform labor laws, as Germany did 10 years ago. There's no doubt the US is a far larger economy, and what worked for Sweden then may not work for us now. But IMHO, what we've been trying so far under Obama has not worked very well; it's time to change course and try some alternative approaches.
The American Spectator : Free Market Sweden, Social Democratic America

So your formula is to bring our country's level of socialism up to the Swedish level?

That's our path to success?

lol

No, you idiot, what I'm saying is that we should try many if not all of the same policies that they followed to get themselves out of economic doldrums.

 

[Greenbeard]

What is this supposed to be a comparison to? If it's the United States, then this doesn't make any sense. A nation with a 30%+ payroll tax, 25% VAT, and individual marginal income tax rates that get above 50% is the role model for a lower tax U.S.? A nation in which 97 percent of medical costs are financed publicly is the key to avoiding single payer in the U.S.?

I just don't get it. I assume, given the source, that the lesson we're supposed to take away is not that more social democracy would've helped us weather the Great Recession a lot better than we did. But then it seems the subtext is "be more like Sweden," which is the same thing.

 

[Wiseacre]

What we have here is a concerted attempt to change the subject. Deflection and diversion, typical democrat responses. Either that or a reading comprehension problem.

Short version: Sweden raised taxes too high and overspent. 20 years ago they got wise and cut taxes and spending. It worked. Moral of the story: cut taxes and spending instead of raising them.

 

[Listening]

No, you idiot, what I'm saying is that we should try many if not all of the same policies that they followed to get themselves out of economic doldrums.

I feel for you.

It is quite clear that what you've done is pointed out that Sweden...and here we should step aside...

Sweden is a country. It has specific system of taxes and government activity that have been part of their fabric for a long time (the basics). I view that as basic....an engine.

What was then done in the 80's was to surround that engine with certain circumstances.

They shifted.

The doubled the tax burden (not for grins I am sure).
The socialized some industries
Increased government systems (some examples would be good)
Shuttered their borders (who was coming in ?).

There was a result.

Stagnation
High UE
Increasing public debt.

What is not clear is how these impacted things...the relationship.

Sweden then reverses the shifts and things get better (except for UE).

So the conclusion is that we should do the same.

I would suggest we need to explore it further.

Just to look at some questions....

What caused them to make the changes in the first place. I am sure they didn't try to fix something that was broken.

Next, what were the internal cause and effects of the changes. I see your point.

Greenbeard is being obtuse and stupid when he asks questions he knows the answers to.

But I think we do need more information.

I like discussing this kind of thing in detail in these forums because it keeps the turds like Christ (Obama had done a great job) and Franco (dupes...dupes...uh, well, dupes) out of it.

Thanks for posting this.

Looking forward to learning more.

Now, as to why Obamanomics failed.....we'll have to see what is parallel and what isn't.

 

[Greenbeard]

According to Heritage's economic freedom rankings (on which we rank 10th and Sweden is 21st):

U.S.:

In the absence of comprehensive tax reforms, the top individual and corporate tax rates remain at 35 percent. Other taxes include a capital gains tax and excise taxes, with the overall tax burden amounting to 24 percent of total domestic income. Government expenditures have grown to 42.2 percent of GDP, and the budget deficit is close to 10 percent of GDP. Total public debt is now larger than the size of the economy.

Sweden:

The top income tax rate is 57 percent, and the top corporate tax rate is 26.3 percent. Other taxes include a value-added tax (VAT) and a capital gains tax, with the overall tax burden amounting to 46.4 percent of total domestic income. Government spending has risen to a level equivalent to 55.2 percent of GDP. The budget balance has recorded small deficits in recent years, and public debt amounts to a bit more than one-third of total domestic output.

So it looks like they spend more than we do, they just go through the trouble of paying for it. Good to know that has better results.

 

[Listening]

Here is the opening paragraphs from the author:

"Sweden" isn't the first word that normally crosses our minds when we hear the expression "free market." But if President Obama, Paul Krugman, Warren Buffett, and other progressives want to find ways out of America's seemingly-intractable economic crisis, they might consider looking to the country once viewed as the very model of a modern Social Democracy.

They're likely to be surprised -- and probably appalled -- by what they discover. For while America has opted for more deficit-spending, bailouts, socialized medicine, easy money, failed state-subsidized Solyndra-like green businesses, "job-plans," and thus-far unsuccessful efforts to raise taxes, Sweden has been quietly turning social democracy into a museum-piece.

******************

This is interesting. I will try to find out what I can in terms of economic data on Sweden.

 

[Listening]

Sweden is today one of the world's economic success stories;

O.K.

That is quite a claim.

How do we define a success story. Can we sort that out ?

 

[NYcarbineer]

Sweden is today one of the world's economic success stories; but that wasn't always the case, in the 70s and 80s they doubled their overall tax burden, socialized a bunch of industries, increased regulations over it's markets, expanded it's public systems, and shuttered it's borders. The result? Economic stagnation, high UE, and a fast rising public debt; and by 1990 real wages only increased by 1% over those 20 years - bigger gov't did not turn out to be the answer. Remember ABBA, Bjorn Borg, Ingmar Berman? Famous and wealthy Swedes, they and others left home for more friendly financial climes.

So, in the 90s they cut taxes, de-regulated their markets, and went to a sound money, low inflation monetary policy. They divested themselves of the aforementioned industries, granted independence to it's central bank, and introduced a school voucher system that improved choice and competition in education. They cut the public pension system and introduced private pension programs; UE benefits, sick leave, and early retirement benefits were all streamlined to encourage work. The result: fewer people on the public dole, which is a big reason for their sound financial situation today. Another reason: they partially privatized their Social Security system.

In 2006, they cut property taxes, even for the rich guys. In 2005, they abolished inheritance taxes. Both policies were done to encourage entrepeneurs to come to Sweden to create new businesses or expand existing ones. Private providers were allowed to enter the healthcare market, thereby introducing competition into what was a very socialistic medical system (single payer). Same thing for the utilities and agriculture industries, prices are now determined by market forces without gov't intrusion.

So, what happened? Sweden started running surpluses instead of deficits. Their gross public debt dropped from 78% in 1994 to 35% in 2010, and they weathered the Great Recession a lot better than we did, in 2010 their growth rate was 5.5% but ours was 2.7%.

They still have an unemployment problem, pretty much like everyone else. Some say that is due at least in part to a high minimum wage imposed by the powerful Swedish unions; Sweden has not been able to do much to reform labor laws, as Germany did 10 years ago. There's no doubt the US is a far larger economy, and what worked for Sweden then may not work for us now. But IMHO, what we've been trying so far under Obama has not worked very well; it's time to change course and try some alternative approaches.
The American Spectator : Free Market Sweden, Social Democratic America

So your formula is to bring our country's level of socialism up to the Swedish level?

That's our path to success?

lol

How do you know that Sweden today has more socialism than the US under Hussein Obama?

Because I have a brain and common sense.

 

[Listening]

So it looks like they spend more than we do, they just go through the trouble of paying for it. Good to know that has better results.

What has better results ?

 

[NYcarbineer]

Sweden is today one of the world's economic success stories; but that wasn't always the case, in the 70s and 80s they doubled their overall tax burden, socialized a bunch of industries, increased regulations over it's markets, expanded it's public systems, and shuttered it's borders. The result? Economic stagnation, high UE, and a fast rising public debt; and by 1990 real wages only increased by 1% over those 20 years - bigger gov't did not turn out to be the answer. Remember ABBA, Bjorn Borg, Ingmar Berman? Famous and wealthy Swedes, they and others left home for more friendly financial climes.

So, in the 90s they cut taxes, de-regulated their markets, and went to a sound money, low inflation monetary policy. They divested themselves of the aforementioned industries, granted independence to it's central bank, and introduced a school voucher system that improved choice and competition in education. They cut the public pension system and introduced private pension programs; UE benefits, sick leave, and early retirement benefits were all streamlined to encourage work. The result: fewer people on the public dole, which is a big reason for their sound financial situation today. Another reason: they partially privatized their Social Security system.

In 2006, they cut property taxes, even for the rich guys. In 2005, they abolished inheritance taxes. Both policies were done to encourage entrepeneurs to come to Sweden to create new businesses or expand existing ones. Private providers were allowed to enter the healthcare market, thereby introducing competition into what was a very socialistic medical system (single payer). Same thing for the utilities and agriculture industries, prices are now determined by market forces without gov't intrusion.

So, what happened? Sweden started running surpluses instead of deficits. Their gross public debt dropped from 78% in 1994 to 35% in 2010, and they weathered the Great Recession a lot better than we did, in 2010 their growth rate was 5.5% but ours was 2.7%.

They still have an unemployment problem, pretty much like everyone else. Some say that is due at least in part to a high minimum wage imposed by the powerful Swedish unions; Sweden has not been able to do much to reform labor laws, as Germany did 10 years ago. There's no doubt the US is a far larger economy, and what worked for Sweden then may not work for us now. But IMHO, what we've been trying so far under Obama has not worked very well; it's time to change course and try some alternative approaches.
The American Spectator : Free Market Sweden, Social Democratic America

So your formula is to bring our country's level of socialism up to the Swedish level?

That's our path to success?

lol

No, you idiot, what I'm saying is that we should try many if not all of the same policies that they followed to get themselves out of economic doldrums.

"Private providers were allowed to enter the healthcare market"

So we should do that, because we don't have privately provided healthcare in our system?

LOL, you're cracking me up!

 

[Greenbeard]

What has better results ?

Robust free market institutions and smart, efficient regulation, coupled with strong social spending. I'm glad someone raised Sweden's example.

 

[rdean]

Sweden is today one of the world's economic success stories; but that wasn't always the case, in the 70s and 80s they doubled their overall tax burden, socialized a bunch of industries, increased regulations over it's markets, expanded it's public systems, and shuttered it's borders. The result? Economic stagnation, high UE, and a fast rising public debt; and by 1990 real wages only increased by 1% over those 20 years - bigger gov't did not turn out to be the answer. Remember ABBA, Bjorn Borg, Ingmar Berman? Famous and wealthy Swedes, they and others left home for more friendly financial climes.

So, in the 90s they cut taxes, de-regulated their markets, and went to a sound money, low inflation monetary policy. They divested themselves of the aforementioned industries, granted independence to it's central bank, and introduced a school voucher system that improved choice and competition in education. They cut the public pension system and introduced private pension programs; UE benefits, sick leave, and early retirement benefits were all streamlined to encourage work. The result: fewer people on the public dole, which is a big reason for their sound financial situation today. Another reason: they partially privatized their Social Security system.

In 2006, they cut property taxes, even for the rich guys. In 2005, they abolished inheritance taxes. Both policies were done to encourage entrepeneurs to come to Sweden to create new businesses or expand existing ones. Private providers were allowed to enter the healthcare market, thereby introducing competition into what was a very socialistic medical system (single payer). Same thing for the utilities and agriculture industries, prices are now determined by market forces without gov't intrusion.

So, what happened? Sweden started running surpluses instead of deficits. Their gross public debt dropped from 78% in 1994 to 35% in 2010, and they weathered the Great Recession a lot better than we did, in 2010 their growth rate was 5.5% but ours was 2.7%.

They still have an unemployment problem, pretty much like everyone else. Some say that is due at least in part to a high minimum wage imposed by the powerful Swedish unions; Sweden has not been able to do much to reform labor laws, as Germany did 10 years ago. There's no doubt the US is a far larger economy, and what worked for Sweden then may not work for us now. But IMHO, what we've been trying so far under Obama has not worked very well; it's time to change course and try some alternative approaches.
The American Spectator : Free Market Sweden, Social Democratic America

I love it when right wing bloggers give an "opinion" as "fact" and use cherry picked "statistics" to back up their "facts".

The Swedish healthcare system gives everyone who lives or works in Sweden equal access to heavily subsidized healthcare. The system is taxpayer-funded and largely decentralized, and performs well in comparison with other countries at a similar level of development.

Health care - SWEDEN.SE

Republicans want to cut medicare and are running on "let him die".

No one is left behind; the Education Act states that children in need of special assistance at school should receive it. The law also says there must be equality in education for all children, wherever they live in Sweden and regardless of ability or disability.

Swedish education - SWEDEN.SE

Mitt Romney says we need less teachers and a larger class size. Rick Santorum said education is for snobs.

Economists and politicians have long pointed to Sweden as a role model because of its successful combination of generous welfare benefits and high-tech capitalism. It constantly places near the top in international rankings of competitiveness, innovation and standard of living. Taxes are high, but the streets are clean.

Swedish economy - SWEDEN.SE

Republicans say "every man for himself" and they don't want to invest in this country. Iraq, yes, here, no.

Most liberals agree with Sweden. Most Republicans agree with third world dictators running Banana Republics.

 

[NYcarbineer]

It's funny that whenever I have mentioned the economic success of Sweden in the past, the 'nuts around here would pile in and say Sweden is too small to compare to the US, but,

of course, when some propagandists from the Spectator say essentially the same thing, all of the sudden it's brilliant.

 

[Listening]

Not that it is a measure..I am looking for a comment.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

U.S. GDP is 15,010,000,000 for 310 million people. (48.4 per person)

Sweden is 538, 237,000 for 9.3 million people. (57.8 per person)

Did I do that right ?