Sweden goes Conservative and Deficit Free

Posted by PITHOCRATES - April 22nd, 2012

Week in Review

So far the Keynesian advice has been consistent to get us out of these financial difficult times.  And wrong.  If you want proof look at Sweden.  When the Keynesians said stimulus the Swedes did instead something wholly anathema to Keynesians.  They cut taxes.  And guess what?  They don’t have a debt crisis.  How about that?  But wait.  It gets better.  They no longer have a deficit (see Sweden’s Finance Minister Helped Cut The Deficit — By Cutting Taxes by Adam Taylor posted 4/20/2012 on Business Insider).

With the Swedish deficit wiped out last year (and Borg’s Conservatives voted back into power) the decision is now looking increase wise.

“Everybody was told “stimulus, stimulus, stimulus”,” he tells Fraser. “It was surprising that Europe, given what we experienced in the 1970s and 80s with structural unemployment, believed that short-term Keynesianism could solve the problem.” Non-economists, he says, “might have a tendency to fall for those kinds of messages”.

Instead, Borg cut taxes in a bid to lure entrepreneurs, and lowered benefits to make up the difference. Entrepreneurs “are the source of job creation,” says Borg.

The history is all there to see.  Keynesian economics failed in the Seventies.  Absolutely.  But those who thought like Anders Borg, Margaret Thatcher and Ronald Reagan, did what he did in the Eighties.  Thatcher turned the UK around.  And Reagan turned the U.S. around.  Pity no one remembers history these days.  Other than Sweden’s Finance Minister. 

A conservative in Sweden?  Who would of thunk it?  If only Europe and the United States would follow Sweden’s lead then they, too, could have smaller deficits.  And more prosperous economies.  But, alas, they simply can’t put their people before their politics.  Apparently.

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