From Investors Business Daily, a story about about a nation that changed course – and won big.
Excerpt:
The turnaround has been driven in no small part by the election of Fredrik Reinfeldt as prime minister in 2006. He took office in October of that year and by January of 2007, tax-cutting had begun. The Reinfeldt government also cut welfare spending — a form of austerity — and began to deregulate the economy.
[…][A]s Finance Minister Anders Borg told the Spectator, the Reinfeldt government was simply continuing the last 20 years of reform.
[…]Sweden fell into recession in 2008 and 2009, as did many developed nations. But it’s pulled strongly out of the decline, posting GDP gains of 6.1% in 2010 and 3.9% last year, when it ranked at the top in Europe’s list of fastest-growing economies.
[…]Under Borg, Sweden handled the downturn in the most un-European way. “While most countries in Europe borrowed massively, Borg did not. Since becoming Sweden’s finance minister, his mission has been to pare back government. His ‘stimulus’ was a permanent tax cut,” Fraser Nelson wrote last month in the Spectator.
Borg strongly opposed the Keynesian solution, which the left continues to advance while it inveighs against an austerity that has yet to be implemented.
He also refused to resort to the trickery of a stimulus, instead cutting the taxes that he knew were hindering entrepreneurs from giving the economy the kick it needed.
The country needed innovators and capitalists — “the source of job creation,” says Borg — and he did what he had to, to attract new ones and to keep those already there from leaving.
During Sweden’s decline into a welfare state, it became, as Borg told the Spectator, “a textbook case of European economic sclerosis” punished by “very high taxes and huge regulatory burden.”
That lasted until the 1990s, when the nation realized it had to return to the market policies that had made it rich prior to the onset of its cradle-to-grave coddling.
How much further can Borg and Reinfeldt take their reforms? Will voters ask them to come back and complete the job?
After all, it’s not over. Though it continues to fall, Sweden’s government debt as a share of GDP is still too high at 38.4%. And while it’s dipped below 45% for the first time in decades, the country’s tax-to-GDP ratio is still far too steep.
Despite this unfinished business, Sweden is still moving in the right direction. We might be able to say that about America after the 2013 Inauguration Day. But we can’t say that now.
If liberals are so smart, why can’t they take time off from taxing, spending and buying votes, in order to look at countries that are having economic success? Isn’t it “smart policy” to do what works? Why listen to Hollywood celebrities and people with journalism degrees when we can just do what has been proven to work? It’s not like what we are doing now is working.
