On Government Reform, Look North (Or Nordic)
Nordic Nations As Economic “Supermodel”
When references are made to the Nordic nations of Sweden, Norway, Finland and Denmark, it is often with regard to their generous welfare systems. Recently, however, they have led the way in reforming how government should work and might serve as an example for the US and Europe on how to reinvent capitalism.
Just how far they have moved to the right is in the numbers, reports The Economist.
“Government’s share of GDP in Sweden, which has dropped by around 18 percentage points, is lower than France’s and could soon be lower than Britain’s. Taxes have been cut: the corporate rate is 22%, far lower than America’s. The Nordics have focused on balancing the books. While Mr Obama and Congress dither over entitlement reform, Sweden has reformed its pension system. Its budget deficit is 0.3% of GDP; America’s is 7%’.”
In addition, the magazine notes, Denmark and Norway allow private firms to run public hospitals, while Sweden and Denmark have embraced school vouchers. Conversely, in the nation’s capital, politicians have moved against broadening the school voucher system.
The How Of Budget Cuts Is As Important As The How Much
The greatest challenge in the coming years may not be where to trim the national budget, but how to do it in a “way that preserves the ability of the government to make much-needed public investments and to tackle our long-run economic challenges,” contends the Brookings Institution in a recent paper.
With smart budgeting in mind, Brookings launched a project to examine the Federal budget and design creative ways to achieve that end. The Hamilton Project has outlined a list of recommendations on how to trim the budget in a manner that it believes will reform government spending in the right way.
These include budgeting for tomorrow’s defense needs, implementing entitlement reforms and eliminating fossil fuel subsidies.
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