That Shiny Nordic Welfare Model: Cato Looks At the Real Stats
[Thanks to newsimg.bbc.co.uk for the image.]
Cato has once again pulled through with this article that goes into the real situation.
It turns out the Nordics have indeed succeeded in some areas, but it's not where the welfare people think.
On the bad side, you have the government spending 48 percent of GDP. This is the cost of many of those "great" programs. In the US, this figure is 37 percent (less, but also a lot).
To pay for it all, you have tax revenues. The Nordic's burden averages more than 45 percent, and in the US it's 25 percent, of GDP.
On the other hand, surprisingly, the North has put policies in place that are more free-market than we are. This may shock most of us, and it certainly sets the record straight. According to Daniel Mitchell's article:
"Notwithstanding problems associated with a large welfare state, there is much to applaud in Nordic nations. They have open markets, low levels of regulation, strong property rights, stable currencies, and many other policies associated with growth and prosperity. Indeed, Nordic nations generally rank among the world's most market-oriented nations."
This is a surprise. We all thought they were socialist through and through. Not so.
"Every Nordic nation has a lower corporate tax rate than the United States, for example, and most of them have low-rate flat tax systems for capital income. Iceland even has a flat tax for labor income. And both Iceland and Sweden have partially privatized their social security retirement systems."
Wow. So we do have something to learn from those northerners, but it's not the welfare-state lessons you'd think. On the contrary: If their redistribution planning is still standing, it is because they have gone further than we have towards freeing up some of their markets, lowering the tax burden, and privatizing one of the most costly government benefit systems there is.