Article [and my comment]: The Nordic Option


COMMENT TO Roger Cohen regarding his “Nordic Option” article, posted below:

You can’t just compare the top tax rate in Sweden vs. the top tax rate in the US. You say [S]weden’s top personal income tax rate of 56 percent would make Americans pale.” What you fail to do is a full comparison of what people get (benefits) and what they pay (costs). That would turn your simpleton conclusions upside down. [Click through to read the rest]

In Sweden everybody gets health care, kids get day care, parents get a lot of paid time off when they have kids (many months), workers get 4-8 weeks of vacation, old people get free home services, food deliveries, cleaning, healthcare, the more elderly get free homes, students get a free education with no student loans, when you go to the doctor there are no forms to fill out, no insurance companies to deny your claims, etc. You pay a very simple and easy to calculate tax rate. In the US, you pay a federal tax, a state tax, a local tax, a sales tax, a property tax, etc. You also pay for your own health insurance, deductibles, retirement plans, nursing homes, day care centers, etc. You also pay a lot for houses and rent.

Now if you really care about the truth, go ahead and add up to total value of the costs and the total value of the benefits to the median- and/or average-income-earning person in both countries. I’m guessing it will come out that the average American pays a lot more and gets a lot less than the average Swede. Sure, the rich in America are better off, but everybody else is worse off. Such as the 47 million Americans without health insurance (or even the “lucky” ones with their crapy and expensive health insurance). Not the mothers who have to go right back to work. Or the families who can’t afford day care. Or the old and/or sick people and their families who go broke due to medical bills. Or the students who enter college idealistic and enthusiastic to make a difference and come out broken and sullen, with student loans many of them can’t pay, forcing them to give up their dreams and take some crap job just so they can struggle by keep their heads above water.

Now who’s pale?

PS: If Anders Borg is the “poster boy of the New Moderates,” of what is george bush the poster boy?

PPS: In Sweden they’d rather have a guy who knows his shit and looks however he wants than a guys who doesn’t know shit, but “looks like” a “president.” Actually Bush doesn’t look like a president, but you get the point. So I take it you will be voting for Fred Thompson? He looks much better than the other two, right? I mean he’s an old white guy, and that’s how you like your politicians, obviously (based on your choice of words to describe Mr. Borg).


From the September 17, 2007, New York Times:
The Nordic Option


Think Sweden and what comes to mind is probably not a youthful finance minister, with his long dark hair in a ponytail and a gold ring through his left ear, explaining that his ambition is to make it “more profitable to work” than to sit around on welfare.

But Anders Borg, 39, poster boy of the “New Moderates” who have put the long-governing Social Democrats out of office, does just that, and when the question of his coiffure comes up, the retort is swift: “This is northern Europe, a modern society. Your public deficit or surplus is more important than your hairstyle.”

Right. Sweden, of course, has a surplus that the deficit-ridden United States can only envy, as well as a knack for staying out of wars that borders on the obscene. It’s that reasonable, semi-socialist, Volvo-driving, super-taxed Nordic place that gave the world Ikea’s cheap furniture and Bergman’s dissection of marriage.

Or is it? The ponytailed finance minister — a world first? — is just one sign that something funky is up in the Swedish woods. A government that includes the country’s first black, avowedly gay and bisexual ministers (that’s three distinct people) has set about a radical reform of the generous welfare state that defined the Swedish condition.

In doing so, it has adopted a few core principles. It should be more profitable to work than not to work. Welfare should mean caring for people who cannot care for themselves. Unemployment insurance should be adjustment insurance rather than an open-ended sinecure. Employers should be encouraged to hire through lower taxes.

Hardly rocket science, you might say, but all of this has proved radical enough to make “systemskifte,” or “system shift,” the buzzword in Sweden. The term might be applied to much of northern Europe, where in recent years the welfare state has been upended even as its essence has been preserved.

Europe, at peace and undivided, has not been foremost on the American mind of late. Old images of “Eurosclerosis” — the vacationing worker (or non-worker) stripped of initiative by an overbearing nanny state — have tended to endure. But in countries including Britain, the Netherlands, Denmark and to some degree Germany, welfare has ceded to what Borg calls “work-fair.”

The transformation has brought streamlined state sectors; more flexible labor markets; a focus on social fairness through improved education and health care rather than through attempts at income redistribution via high taxes; a restored work ethic (“Make Work Pay” is a Swedish government slogan); and a rediscovery of entrepreneurship and choice.

“Our principle is you should show solidarity with people who have problems for a space in their lives, but they should not be supported permanently by the welfare state,” Tobias Billstrom, the migration minister, says.

Billstrom is all of 33 and sports multicolored buttons on his shirt. He’s a backer of the reforms because Sweden doesn’t want the immigrants pouring into the country to think collecting subsidies and working on the black market are the Swedish way.

Sweden has learned that a rigid labor market is a devastating form of exclusion (France, take note). Its aging population, like others in Europe, needs immigrants to find jobs and so pay the taxes that will fund pensions into the future.

By slashing unemployment benefits, making it easier and cheaper to hire, offering tax credits to employers taking on people who have been jobless for a long time, and providing tax incentives to lure domestic jobs out the black market, Sweden has cut unemployment to 4.4 percent, or about half the French rate.

Growth in 2007 of 3.2 percent will be among the highest in Europe and handily top the U.S rate. Surpluses keep accumulating. All nine million Swedes have health insurance, while 47 million Americans, or the equivalent of five Swedens, do not. And the school system delivers high standards.

Of course, Sweden doesn’t have the world to run, and a top personal income tax rate of 56 percent would make Americans pale. Still, Sweden’s new Nordic model merits attention.

“My idea,” Borg says, “is to combine the entrepreneurial spirit of America with the welfare of Sweden. That’s my ideal world: the creative impulse and restructured welfare. The lowest quarter of our population is well educated. The United States could learn from that.”

It could indeed. Northern Europe has looked to America for some of its reforms. America, Iraq-obsessed, has not looked to a changing Europe. A stagnating middle class, losing jobs and health insurance, holds the key to victory for Democratic candidates next year if they can suggest strong programs for better education and universal health care.

A stop in funky Stockholm is in order for Hillary Clinton, John Edwards and Barack Obama.


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