Robert J. Samuelson of the Washington Post wrote an article on April 25th entitled, “The Swedish model for economic recovery.” It echoes what I wrote about in, “Sweden’s Swing To The Right Brings Prosperity.”
His third paragraph states, “Conservatives can take heart that many post-crisis policies came right from their playbook. Sweden’s income tax base was broadened and tax rates were sharply reduced…. Spending was cut on old-age pensions, child allowances, unemployment benefits and housing subsidies. Union power over wages was reduced. Many markets (banking, air travel, telecommunications, electricity production) were deregulated. Low inflation and balanced budgets became broadly popular goals.”
Sweden’s Finance Minister, Anders Borg, stressed that the aims of the government were “to reward work by cutting tax rates; to push people back into the labor market by reducing government benefits, and to promote productivity by increasing competition.”
Interestingly, Sweden has also cut back on health spending as a money saving policy. In 1980, Sweden and the US were spending about the same amount as a share of their Gross Domestic Product. Now Sweden’s health care spending is half of the US spending level. Higher patient co-payments have been instituted “to discourage people from overusing health services,” according to Borg.
While the rest of Europe faces austerity measures, Sweden has demonstrated that the conservative approach can lead to prosperity. Unfortunately, the Obama Administration ignores the valuable lessons offered by the economic recovery of Sweden. You have to wonder why?