Sweden showing America the way?

| February 4 2013
Christopher Cook

Privatized schools and school choice . . .

Avoiding deficit spending . . .

Controlling and reforming entitlement programs . . .

Changing from defined-benefit to defined-contribution pensions . . .

 

Sounds like items from a conservative or Republican economic platform, doesn’t it?

In fact, these are among the steps that Sweden has been taking to reform their economy. Here are others:

Sweden has reduced public spending as a proportion of GDP from 67% in 1993 to 49% today. It could soon have a smaller state than Britain. It has also cut the top marginal tax rate by 27 percentage points since 1983, to 57%, and scrapped a mare’s nest of taxes on property, gifts, wealth and inheritance. This year it is cutting the corporate-tax rate from 26.3% to 22%.

Sweden has also donned the golden straitjacket of fiscal orthodoxy with its pledge to produce a fiscal surplus over the economic cycle. Its public debt fell from 70% of GDP in 1993 to 37% in 2010, and its budget moved from an 11% deficit to a surplus of 0.3% over the same period. This allowed a country with a small, open economy to recover quickly from the financial storm of 2007-08. Sweden has also put its pension system on a sound foundation, replacing a defined-benefit system with a defined-contribution one and making automatic adjustments for longer life expectancy.

One might disagree with aspects of the way Sweden does things in plenty of areas, but one cannot deny that they have met with considerable success at implementing some items that have long been on the wish-lists of American conservatives and libertarians.

Watch the video below, and read the rest of the piece here. Imagine the health we could inject into our economy if we implemented a few of these.

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