On Oct. 13, 2015 presidential candidate Bernie Sanders said in an interview on CNN that “We should look to countries like Denmark, like Sweden.”
I agree with Sanders, we need to be more like Sweden. The problem is Sanders either has no idea what Sweden is like, or he is lying to us.
Perhaps the reason Sanders points to Sweden is that many Americans believe Sweden is a “democratic socialist utopia” as shown by interviews of Americans in a PBS documentary from 2018. Not so.
Let’s look at a history of Sweden. Between 1850 and 1950 income per capita in Sweden increased 8 times and their taxes were lower than 20% of GDP.
In 1974 Sweden was richer than the average Organization for Economic Cooperation and Development (OECD) country.
Then they started to build a large welfare state. Twenty years later, in 1994, after embracing socialism, they had dropped from the 4th richest country in the world to the 13th. Real wages became stagnant.
It was during this time big government in Sweden brought about high taxes.
Then after their experiment with socialism Sweden reintroduced free market reforms. In the next 20 years real wages increased 70 percent.
According to Stockholm native Johan Norberg Sweden is not a socialist country. He says, “Sweden is much like other places, free markets worked here, it made us rich. But then big government almost ruined us. Reform since then got us back on track.”
Denmark is also not a socialist country. The Fraser Institute’s Economic Freedom of the World index ranks Denmark 16th (out of 162 countries). According to the Heritage Foundation’s Index of Economic Freedom, Denmark (ranked 12th out of 180 countries) ranks higher than the US (18th).
Let’s look at some of the free market reforms that Sweden has embraced, some of the same ones that the Republican party has attempted to bring about in America, only to see them attacked in the media and by the Democrat party.
1.) Sweden does not have a national minimum wage. Imagine that. Allowing the free market to determine what you are worth.
2.) Sweden does not have an inheritance tax. Here in the United States you can potentially be liable for three types of taxes — depending on the state you reside in — after you’ve received a bequest from a friend or relative who has died: an inheritance tax, a capital gains tax, and an estate tax.
3.) Sweden has a private national pension system — what we call social security. This takes away the ability of politicians to buy votes through promises of higher social security checks.
You may remember that in 2005 President George W. Bush outlined a major initiative to reform Social Security which included partial privatization of the system, personal Social Security accounts, and options to permit Americans to divert a portion of their Social Security tax (FICA) into secured investments.
He proposed this because Social Security benefits will start to exceed the program’s costs in 2020 — that’s one month away — and the program will deplete its $2.9 trillion reserve fund in 2035. When will you start collecting social security?
President Barack Obama opposed privatization of Social Security.
4.) School voucher system. In Sweden parents get to choose between private and public schools with a voucher system. This forces schools to compete. This competition causes innovation and improvement in education.
Even though a voucher system would benefit blacks in the inter city the most -— and is supported by them — Democrats constantly veto this idea in America.
5.) Higher taxes for low income earners. In Sweden people who earn below average income pay up to 60% in taxes.
One problem we have in America is that too many wage earners pay no income tax. In fact the government gives out tax credits. This leaves them with no “skin in the game” so to speak. Why should they care if big government wastes money, it’s not theirs.
According to a story in Time magazine from June 2016 “Much of Sanders’ policy agenda, in an attempt to turn the U.S. into a Northern European welfare state, is ill-informed and would put America at great risk, if ever implemented.”
The next time you hear a politician spout the benefits of Democratic Socialism like Sweden and Denmark, remember that’s another lie.