Wednesday, September 4, 2013

Which country is moving away from socialism - Sweden or the US?

Here's an interesting post comparing economic freedom in the US and Sweden.  

Sweden has the reputation for socialism par excellence.  It appears that's changing and quite dramatically over the last twenty years.  In fact, regarding economic freedom, Sweden is on par with the US which is moving in the opposite direction.  They've cut government spending and taxes.  The US has been moving in the other direction.
Sweden is no longer a typical European welfare state. Through deregulation, budget discipline, and an extensive overhaul of the welfare state over the past two decades, the country has transformed itself from a stagnant, benefit-based society to a vibrant modern economy.

As documented in the Index of Economic Freedom, Sweden has measurably advanced economic freedom over the past 20 years and dramatically narrowed the gap with America, whose economic freedom has been declining at an alarming rate. (continues below chart)
Since 1995, Sweden has reduced its government spending as a portion of gross domestic product by almost 20 percent while America’s has increased by close to 10 percent. Not content merely to downsize government, the country known for ABBA and IKEA has also engaged in the global tax-cutting race and reduced its corporate tax rate to 26.3 percent from 60 percent. Notably, Prime Minister Fredrik Reinfeldt has implemented a further reduction of the corporate tax rate to 22 percent, pointing out that corporate income tax is “probably the most harmful tax of all.”

It is not surprising that Sweden has shown enviable economic resilience during the global downturn, even as America’s entrepreneurial pulse is on virtual life support due to the big-government policies of the Obama Administration.

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