Good Capitalism and Good Socialism
One of the problems with Sweden’s socialism economy is the fact that its social programs cost the government too much. The Swedish government’s budget deficit has been as high as twelve percent of the gross national product. At the end of the Reagan-Bush era, America has only had a government budget deficit as high as five percent. The Swedish national debt is proportionately forty percent higher than America.
If and when Sweden desires to pay off its debt or if its borrowers desire their money back, most likely they will raise taxes. Tax increases discourage spending. In America, more thought is taken into account to make up for budget shortfalls by eliminating “social” programs. For example, the shortfall in the state of Connecticut will be resolved through a combination of cuts to various state-funded departments and programs, laying-off of state workers, and a millionaire’s tax increase.
One of the biggest wastes of government money is Sweden is the fact that the country maintains an entire national state-supported religion with bishops, a synod, and pastors in every parish when only five percent of their population actually attends church. In America, more than five percent of citizens attend church but the government does not fund religion.
Separation of church and state and the first amendment gives Americans freedoms regarding their choice in religion and prohibits the government from adapting a national religion. Sweden should slowly phase out their state-supported religion and take the same stance America has on the issue.
According to Peter Stein in his book Sweden: From Capitalist Success to Welfare-State Sclerosis, Swedish doctors work an average of only 1,600 hours a year compared to U.S. doctors who work an average of 2,800 hours. Swedish doctors work less than U.S. doctors because they are paid the same to stay at home as they are when they work. This is a severe problem to a society that has a health care system at nominal costs to its citizens. In other words, in Sweden it might be tough to find a doctor but it costs little to see him or her while in America it is fairly easy to make an appointment with a doctor put citizens must either pay out-of-pocket or it is paid through their insurance company.
Doctors as well as other professions in Sweden suffer from the fact that income taxes are so high that when people do get raises or bonuses they are taxed away.
Too many people are paid by the Swedish government not to work when the government should phase out these programs to encourage people to work. More than 46% of the Swedish government budget is spent on transfer payments giving cash to people. This simply is not necessary. The U.S. Government offers welfare to those without jobs but it is limited, is designed as temporary relief, and much of society looks down upon those who live on welfare.
Sweden’s pro-business climate began as a result of the 1864 business freedom law. Business freedom is usually a principle that few socialist countries have making Sweden unique. The five weeks of legally mandated paid vacation the Swedish government provides for its citizens greatly lowers the amount of profit businesses can make. When businesses have to pay people not to work their profits go down resulting in downsizing and bankruptcy. The more regulations a government has on employers, the fewer employers will exist which will discourage competition in the economic market. Discouraging competition will result in little choice to the consumer. If Sweden still wants to require employers to give employees legally mandated paid vacations, perhaps the amount should be cut down to two weeks.
Sweden’s national sales tax of 25% discourages spending and gives social programs to people who don’t need them. For example, parents need only pay 10% for daycare programs while the government pays for the other 90%. However, every taxpayer is helping to pay for that 90% regardless whether they will ever need it or not.
More programs should be developed to encourage Swedes to invest in the stock market rather than just invest in government bonds. Since Sweden is one of the most pro-business countries in Europe, the country should adapt a stock exchange system similar to the New York Stock Exchange (NYSE). It is quite possible that Swedes will invest in the stock market as the country continues to be one of the most computer literate and hi-tech friendly country in the world. One of Sweden’s smartest moves was becoming a member of the European Union (EU) in 1995 which allowed them to give small start-up companies access to Swedish government generous grants and start-up support by the EU.
According to the cabinet minister Marita Ulvskog, the Swedish government wants an egalitarianism society in which there are not large differences in regards to income, social welfare and in regions. This lack of multiculturalism in Sweden shows. Unemployment among Turkish Swedes is twenty-five percent of those who are seeking jobs while as many as fifty-percent of Turkish Swedes are not seeking jobs and simply collect money through the social programs in Sweden.
One of the problems of public-sector employment is the fact that people’s wages are paid through taxes. Public-sector employment grew from twenty percent to thirty percent of the workforce between 1970 and 1983 but taxes did not grow enough to support this increase.
Trying to create a society in which everyone makes the same amount makes it difficult to tax one group different than another group. In America, the rich are often taxed more than middle-class and the middle-class are often taxed more than those on the poverty line. The general public in Sweden still does not accept people making a lot of money which forced many wealthy people to leave Sweden to go to countries where the principle of making a lot of money is acceptable.
