Swedish Lessons
It's long been one of those assumed truisms that Sweden is a classic social welfare state--democratic but burdened by the undertow of debt. As with much conventional wisdom, it is simply not quite the case--at least in recent times.
Stockholm's center-right coalition government has massively reduced public spending as proportion to the GDP from 67% in 1993 to 49 % today. In fact since the days of plenty in the 1970's, Sweden has seen more of its wealth disappear in taxes and debt. The population became relatively poorer. Since the 1990's things have turned around for the better for the nearly 10 million Swedes. Economic growth has averaged 2.2 %.
The welfare state model was simply not sustainable. Look at the numbers; public debt fell from 70% of GDP in 1993 (just twenty years ago!!) to 37% in 2010. In 2012, gross government debt remains under 40%.
As a point of comparison the USA gross debt has surpassed 100%!!! and the European Union debt averages 85%. Sweden is a EU member.
The World Economic Forum now ranks Sweden #1 globally for business in terms of competitivenes, innovation, and ease of commerce. Denmark and Finland are number two and three. The USA has slipped to #8.
Is there a lesson here?
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