The Swedish Deal

Great commentary at Spero about the reality of Sweden's welfare state and economy. Excerpt:

A closer examination, however, reveals that the famous "Swedish Model" does not work very well. This system, which combines high taxes and a large government sector with laissez-faire policies in other areas, is supposed to generate strong growth while also providing protection against the vicissitudes of a market-based economy.

This system may work better than the "Continental Model" of across-the-board big government, which has caused stagnation in places like France and Germany, but it is not a recipe for economic prosperity. In 1970, Sweden was the world's third-richest nation, but it has fallen in the rankings as the welfare state has expanded.[1] Indeed, Swedes now have less per capita disposable income than the average Western European and also trail the U.S., Canada, and several Pacific Rim nations.[2] And, although the official jobless rate is about six percent, independent estimates suggest the real unemployment rate is between 15”“20 percent.