Let us start with the obvious: everyone thinks Sweden is a mess. They are the country that imposed a higher than 100% tax rate on author Astrid Lindgren. In the 1970s and 1980s, their tax and spend ways buried the country. Their spending compared to GDP reached a peak of 67% in 1993!! By comparison, our bloated federal government is spending around 25% of GDP. In the same period, they fell from being the fourth-richest country in the world in 1970 to being the 14th in 1993. Sweden became a rallying cry for French socialists and an anti-rallying cry for American conservatives.
They have nothing to teach us. . . right?
Actually, they do.
Indeed, Sweden and the gang have become a model for many countries recently. They have a solid blue print for how to reform the public sector to be efficient and responsive. Businesses are thriving. And China is studying Norway’s social spending model, which actually is self-sustaining, unlike ours. In almost every survey of economic competitiveness to population health to reported happiness, the Nordic countries are pretty much near the top of the charts.
Do you know how they did it? Conservatism.
In the 1990s, the Nordics moved right. Sweden cut their spending from 67% of GDP to 49%... still large, but lower than France’s and lower than Britain’s. Still, it’s way higher than ours, right? Actually, when you factor in federal AND state spending, our “government” spends $6.28 trillion or 41% of GDP. So Sweden doesn’t outspend us by that much, quite frankly.
The Nordic countries have balanced their books too. Sweden’s budget deficit is 0.3% of GDP, ours is 7% and rising fast.
Sweden’s “oppressive” corporate tax rate is 22%. The US rate is 35% plus state taxes.
They aren’t the socialists you think they are either. Denmark and Norway have private firms run public hospitals. Sweden has a universal voucher system for schools which allows private firms to compete equally with public schools. And the performance of all schools is measured and the results are publicly available to all citizens.
The other thing that makes Sweden work is a real opposition to corruption and cronyism. They believe in free trade, not protectionism. They don’t do bailouts or protect famous companies like Saab or Volvo.
There are problems, of course. They employ too many people in their public sector – about 30% of their workforce (compared to 14% here). Their social spending is too high as well because they don’t means test. And their taxes are still too high, as they end up chasing away their most motivated young people.
Still, there is much here to consider. These are conservative ideas: lower taxes, balanced budgets, transparency, competition, privatization, and ending corruption and cronyism. Think about what the US would be like if we could bring those principles here and marry that with the dynamic American public’s desire to achieve the American dream. If conservatism worked for Sweden, then it will work here. Let’s give it a try.