The Swedish Workforce
The post The Nordic Model covered the information of the maximum tax rates and who it was applied to in Norway, Denmark, and Sweden. These taxes are used by the governments to pay for socialist programs admired by liberals in the United States. Hopefully, everyone realizes if the U.S. implements the same style of socialist programs, tax rates here will have to be increased. But higher taxes aren't the only differences that would have to be implemented here in the U.S., and some wouldn't fit that well into the liberal agenda or mindset here.
A major difference between the Swedish government and liberals in the U.S. is the push to have people employed. In the U.S. we leave it up to the individual if they want to work and we focus on developing the economy such that there are jobs available, if people want them. In Sweden people appear to be encouraged if not pushed to work. From Sweden's National Reform Program 2018, the goal for total employment is 80%. This number is based on the desire to have at least 80% of the population of Sweden working rather than some subset of the population arbitrarily chosen.
The 80% goal may best be compared to the workforce participation rate here in the U.S. which is currently around 63%. One big difference is the workforce participation rate counts those that are looking for jobs and the Swedish goal is based on people working. The first section on the Swedish governments initiatives to improve the percentage of people working is titled "Everyone who is able to work shall work". This section focuses on the government taking an active role in assuring that immigrants coming into the country and those with disabilities that can do some form of work are actually working to support themselves and not living totally off the Swedish government.
The system appears to be working, here's a historical chart again from Sweden's National Reform Program of those outside the labor force in Sweden:
The chart shows a steady decline in those outside the labor force.
In the U.S. without the social programs of free healthcare and free education we enjoy lower tax rates, a more progressive tax structure, and have a smaller percentage of our population working than in Sweden. I would make the argument that more people should work in the U.S. increasing our work participation rate and that our tax structure should be less progressive to generate more funding for our government. I would also argue that our government needs to be smarter about how it uses the taxpayers' money. The implementation of free healthcare and education in the U.S. would have to come after we address the social programs we already have that enable so many to live outside our workforce.
I may have misunderstood your post in my earlier comment. You may be advocating for higher tax rates instead of against socialist programs. If so, I apologize for the confusion. I would like to read your argument though as to why the labor force participation rate (LFPR) being so low in the US is a bad thing. Is it because you think people have a duty to work? In the US, many liberals believe that a lower LFPR is good because it means people are spending time with their families, pursuing hobbies, etc. In their view, this is one of the benefits of govt. welfare is that many people don't have to work. Obama in his second term used this argument to defend the declining LFPR.
What is your response to Obama's argument? In other words, why not have less people working if the welfare payments allow them to not work? We don't need the workers anyway, so why force them to work?
I'm just curious to hear your answer.
I'll make it clear. I am against socialist programs and an advocate of lower taxes. Lower taxes have proven time and again to generate economic growth creating jobs for those that want to work.
I am not against a low LFPR either. I believe everyone should have the right not to work if they don't want to. I also believe it is wrong for those not working to provide "time with their families, pursuing hobbies, etc." if the government is forcing others to pay for it. If a person doesn't want to work for more family time and pursuing hobbies I am all for it, IF they can fund that lifestyle themselves. If they can go around to their neighbors each month and obtain donations for paying their bills or live off GoFundMe efforts, I would be ok with that as well. A person deciding not to work and obtaining money from welfare however I cannot accept. At the same time, those that cannot work due to age or disabilities and don't have significant financial support should be taken care of by our society.
During the Obama years millions of people went on welfare and food stamp programs because there were no jobs. There were no "shovel ready projects" as Obama repeatedly told us when he was asking for the $800 billion stimulus. As a result of no jobs, people wearied of looking for jobs and finally gave up and stop looking. Once they stopped looking they were no longer unemployed and the LFPR decreased. To say these people weren't working to spend time with their families or to enjoy hobbies is laughable at best.
From this comment and the previous comment I perceive you have the belief that the government can simply print as much money as they want without consequences. Every dollar the government spends either comes from taxes or from issuing debt. Just as an individual can't survive long term spending money by raising personal debt, a country can't survive by continuing to issue debt. It's not sustainable in the long term.
Thanks for posting this. I enjoyed learning about the labor-force participation rate in Sweden vs. the U.S. However, I have to point out that I don't think you are correct when you say "if the U.S. implements the same style of socialist programs, tax rates here will have to be increased. "
The Swedish Krona is not the world's reserve currency. In fact, it's not even a major currency (most Forex brokers don't even carry it). Because of this, Sweden has to be careful not to print too many Kronas vs. the US dollars they have in reserve. If they print too much money, the Krona will devalue against the dollar. This will make imports more expensive, lowering the standard of living of residents and costing the government more in welfare spending. This is why Sweden has such a high tax rate. It is to prevent the devaluation of the Krona. It is not to pay for welfare programs.
In the U.S., we do not have this problem. We do not need to worry about printing too many dollars vs. krona because the krona is not the reserve currency. This is why a Medicare Advantage for all plan is likely going to be passed in the US. The US govt is likely to create a program where it buys private insurance for all US residents, but the insurance will be provided by the insurance companies and chosen by the consumer. It is likely to do this because it can push the costs of the program onto foreign U.S. treasury holders, not taxpayers.
Aside from that, I share your opposition to socialized medicine. If U.S. taxpayers had to pay for govt. health care programs out of taxes, rich people would only put up with so much before they would leave the country. So the government would not be able to pay for unlimited health care. It would have to impose cost controls, leading to waiting lines and other poor health care outcomes just like what occurs in other countries.
How do you believe the Swedish pay for their welfare programs? They do not have excessively high debt in these countries so they are not paying for it with debt.
Part of being the world's reserve currency is a stewardship we must maintain or put the economy of every country at risk. We cannot simply print as much money as we want without consequences. The U.S. dollar is the reserve currency because it has reliable value. Printing an excess of dollars would be detrimental to that value. It's like everything else, value is based on scarcity and demand. If everyone has something, how can it be worth much?
For the U.S. government to buy private insurance for every American and pass that costs on to U.S. Treasury holders, be they foreign or domestic, is comparable to a family living off credit cards. It will work in the short term but in the long term it will fail.
I apologize for misunderstanding the view you were expressing. I am happy to hear that you are opposed to taxes. I am too. However, I have watched politicians cut taxes over my lifetime, first in the 2000's under George W. Bush and now under Trump. But no matter how many times they cut taxes, they never cut spending. Spending keeps going up, year after year, with no end in sight. And it doesn't matter who gets elected. No matter which party comes into power, spending keeps going up.
The US government also always runs deficits, and the deficits increase over time. I have watched it keep happening over my lifetime. And I do not see any evidence that US voters will ever reject deficits and government spending on their own.
In response, you say:
But this isn't really a good analogy. A better analogy would be something like this:
"For the US Government to buy private insurance for every American and pass that cost on to US Treasury holders...is comparable to if a person was to threaten Wal-Mart with tanks and guns if they do not sell their products for pieces of paper printed by this person. And then, if the person allowed Wal-Mart to lend these pieces of paper back to the same person, but that same person controlled the interest-rate based on the amount of money he printed, this would be like the government passing the cost of socialized medicine onto Treasury bond holders. This will work in the short-run, but in the long-term it will fail"
I agree with you that the system will fail over the long run. I think eventually Saudi Arabia will ally itself with Russia. At that point, it will no longer need the US to protect it. Therefore, it will no longer need to sell its oil for dollars.
But I also don't think it's a good idea for advocates of capitalism to oversimplify the situation. The situation is not like a family that takes on credit card debt. If I take on credit card debt, I can't force the credit card company to give me more credit when it turns out that I can't pay my bill. Nor can I offer to protect the credit card company from invaders and threaten to withdraw that support if they don't keep giving me credit. However, these options are obviously available to the US, and every country in the world knows it, which is why they keep financing US deficits no matter what.
So, while I agree with you that taxes are harmful, I don't think it's a useful practice to go around advocating for tax cuts. To do so IMO just encourages politicians to keep pushing off the costs of welfare programs onto Treasury bond holders. After all, if "taxation is theft," why shouldn't the US just cut taxes to zero and create socialized medicine?
I also don't think it's a good idea to go around saying that the system is going to collapse on its own. The US dollar is held up by military force. If Saudi Arabia was to stop selling oil for dollars and ask for gold instead, the US would immediately withdraw its support, the royal family would be beheaded by crazy Islamists, and the US would invade and put some puppet government in power that would go back to selling oil for dollars. It would be a complete waste of time.
In summary, my point is not that the government can just print as much money as it wants with no consequences. My point is that advocates of capitalism need to be honest about how difficult the situation is. Otherwise, I don't see how there is going to be any progress. I have watched for 25 years as libertarians and economic conservatives have said "we can't have x program because it will have to be paid for with taxes" only to see them beaten time and time again by politicians who promise tax cuts and spending increases. Look at Donald Trump for example. I find it hard to believe that his support for spending increases during the primary wasn't a significant part of the reason that he won the nomination instead of Ted Cruz.
So I think the arguments you are making aren't working. They aren't leading to a freer society. And I'm trying to get you to see that - because a free society is what I want. And the more advocates of capitalism we have that make better arguments, the better the chance of actually accomplishing what we all want.
Regardless, I appreciate you posting this article. Before you posted this, I did not know that Sweden's LFPR was significantly higher than the US. You have educated me. And for that, you have my thanks. I look forward to reading more from you in the future.
I am going outside the terminology used here and simply say that there will always be those that can't work and unfortunately those that won't.
There is no argument that would make me willing support anyone who won't work. Families take care of those that can't. Those that don't want to work are on their own. Worked for years before Government decided to run our lives.
Also, I've always felt if a government had more supplemental programs to just boost those that do work and still need help we could reach a fair distribution of whatever funds are available.
My husband was a house painter. Tough work in winter in Wisconsin. He woukd be layed off during winter months when heat bills were high, school expenses peaked, etc. But! I made too much money for supplemental assistance. While the guy next to me didn't work at all and got his food stamps and utilities paid.
Wouldn't it benefit to encourage people to work snd fill in the financial gaps? Always felt I was being punished for working.
I know I am not exactly on topic here but somehow it just can't be this difficult to be practical and fair with 'public funding'.
And America was built from the ground up by people sweating their asses off and now half the population think work is a four letter word. One of the bad kind.
Last, 'spend time with families and enjoy hobbies'. Thought I was going to explode! Seriously???!!!!
Excellent my friend. If people want to take time off to be with family or enjoy hobbies, they should, but we shouldn't have to pay for it. Your not off topic at all, everyone should be outraged at the thought of supporting others because they don't want to work.
If there is anyone in this country we should support it is those that cannot and possibly don't have the family to take care of them. Charity begins at home and to have it forced on us by a government is tyranny.
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