Can Obama Learn from the Successful Economies?

[Locutus]

By Warren Beatty

Will Obama learn from Sweden? Will he learn from Canada? Or will he cling to the European socialist economic model that is currently failing?

Sweden
Anders Borg, Sweden's finance minister, reduced Sweden's deficit and created economic growth. There is one thing that Borg did: "Since becoming Sweden's finance minister, Borg reduced the size of government and cut taxes. His 'stimulus' was a permanent tax cut."

Canada
Canadian Prime Minister Stephen Harper said that Forbes magazine selected Canada as the No. 1 country in the world in which to do business. Forbes stated, "Credit a reformed tax structure." On New Year's Day, 2012, Canada's corporate tax rate -- both federal and provincial rates combined -- fell to 25%, giving Canada the lowest rate in the Group of Seven countries and a more competitive economy on a global basis. In annual steps, Canada lowered the federal rate from 22% to 15%, while the provinces now have a common rate of 10%. The gradual lowering of the corporate tax rate appears to have resulted in little loss in corporate tax revenue.


Read more: Articles: Can Obama Learn from the Successful Economies?

 

[Machjo]

Right now the USA cannot afford tax cuts and cannot afford current government spending levels even with tax increases.

A short-term solution would be to inflate themselves out of their problems, though that would also have long-term negative consequences. A long-term solution would be to pay down their debt though that would mean biting the bullet in the mean time.

When Canada and Sweden both started down the path of paying down their debts, their economic growth did underperform other countries, but we are reaping the benefits now. Chretien did indeed choose the right time to pay down the debt in the middle of a worldwide boom since the mini-recession it created in Canada was offset by exports.

Now the US is in the bad position of paying down its debt precisely when the rest of the world won't be able to pick up the slack, but it's now stuck in a pickle. The best option would seem to be to just bite the bullet now, tax and axe and get it over with since if it's not now it'll be later.

 

[captain morgan]

There is another option that it to cut spending and (attempt) to bolster the business sector via tax incentives. One of the problems here is that unemployment is still high and any efforts in getting more folks working will have a positive effect on the tax base via the employer's profits, payroll taxes, etc and more folks working and paying into the tax pool.

It seems counter productive, but it would potentially start them down the road on solving multiple problems

 

[Highball]

He lived in one for years and never learned anything about it. It was in Chicago, IL and it was called the Daley Plan. When Daley or his family needed something they called the O'Sullivan boys who went right over and took whatever the boss needed. But then the O'Sullivan's and Obama don't have a close relationship. They only work for Irishmen. Obanjo needs a black Irishman in his administration.

 

[Bar Sinister]

Let me understand something. The author of the article actually thinks that Sweden and Canada are not socialist? Sweden is the archetypical socialist democracy and the current government has done nothing to change that. By all means have Obama follow Sweden's lead. I expect the author would have a brain embolism if that actually happened.

Mr. Beatty seems horribly uninformed. Not only does he not understand that the most successful European economies are already far to the left of the United States, but he also fails to realize that nations like Greece need to do exactly as Paul Klugman advised and leave the Eurozone. That would enable such countries to have a more competitive currency rate, making their goods and services more desirable to foreign buyers.

 

[damngrumpy]

I love this be more like Sweden, do you think the Evangelicals could stand it?
Canada is a social democratic fabric of a nation no question about it. The
irony of it is that the two other parties, Liberals and Conservatives borrowed the
ideas put forward by people like Woodsworth and Tomyy Douglas and then
took credit for them.
The mood of the people is also changing, the great swing to the moderate left
has begun its a generational change that happens just like weather patterns.
It really kicked off in France, don't count the Greeks they are nuts but then Greek
political insanity is normal for that country. Rhetoric and reality dance together
like, well a Greek Tragedy.
Obama senses what is happening and I think he will win a squeaker, because
the political right is not united and they have made a mockery of their own
principles when they saddled up to ride with the Tea Party. Tea Party supporters
are estranged conservatives, like a dysfunctional band of eccentric cousins who
speak without thinking, and once they devalue their own message they turn to
silence hoping others will forget.
It is a case of the old Kennedy statement "oh for the comfort of opinion without
without the discomfort of thought." Harper did not save us, Paul Martin did.
The fact is this government has racked up more debt than Mulroney and its still
growing.

 

[captain morgan]

Obama was hugely successful in mobilizing different demographics to get out and vote. He did this in part by making promises that he was ultimately unable to deliver upon. I believe that he will not be successful in keeping that segment of the vote and there is a strong possibility that those demographics may lodge a protest vote against him.

As far as Greek and French socialism are concerned, these are both presently untested. The test will come for Greece when (and if) they decide to default on their bond obligations which ironically will hit France especially hard. The Greeks can go back to the drachma, but considering that they have already mortgaged their nation to the hilt (and presumably will default on purpose), how do they expect their (essentially) bankrupt gvt to finance the operations of a nation?.. Going to the international investment markets is not an option so it looks like they will have to tax the citizenry (that have no money) to the hilt to deliver their entitlements.

Doesn't sound to practical, does it?

France is positioning themselves to be in the same boat. Hollande won the election by promising the sun, moon and stars to everyone on the premise that they would tax the wealthy to the tune of 75%. I'm sure that you can figure out the reaction that this policy will get and in the end, it will be another nation/jurisdiction that will see the benefit of those tax dollars.

 

[petros]

The Greeks can go back to the drachma, but considering that they have already mortgaged their nation to the hilt (and presumably will default on purpose), how do they expect their (essentially) bankrupt gvt to finance the operations of a nation?..

Arson. Burn it all down and try for the insurance money

 

[captain morgan]

Better check the policy first. If it's under written by a Greek insurer, well, then I guess that you'd be SOL.

I suppose that the Greeks can default and then go crying to the IMF.... They'll wish they hadn't, but it looks like these folks just simply don't get it anyways

 

[damngrumpy]

We are talking about France they don't always see the problem before the see the solution.
The old adage of the French Bakery comes to mind.
Everything at the bakery is going well until something goes wrong. Instead of changing
course or retooling to build a better bakery, angry workers demonstrate and burn the bakery
to the ground. That in Europe is preferable to the the actions in Greece. In the Greek version
they burn down half the town and live in the other half until they rebuild. That way they created
jobs.
When we enter a period of unrest, anything and everything is possible.

 

[petros]

That Obamer must be a busy guy to do all this stuff and stil run around most of the day doing appearances.

 

[captain morgan]

We are talking about France they don't always see the problem before the see the solution.
The old adage of the French Bakery comes to mind.
Everything at the bakery is going well until something goes wrong. Instead of changing
course or retooling to build a better bakery, angry workers demonstrate and burn the bakery
to the ground. That in Europe is preferable to the the actions in Greece. In the Greek version
they burn down half the town and live in the other half until they rebuild. That way they created
jobs.
When we enter a period of unrest, anything and everything is possible.

That's all well and good, but in the end, it still takes money to rebuild the torched bakery.

 

[Machjo]

Let me understand something. The author of the article actually thinks that Sweden and Canada are not socialist? Sweden is the archetypical socialist democracy and the current government has done nothing to change that. By all means have Obama follow Sweden's lead. I expect the author would have a brain embolism if that actually happened.

Mr. Beatty seems horribly uninformed. Not only does he not understand that the most successful European economies are already far to the left of the United States, but he also fails to realize that nations like Greece need to do exactly as Paul Klugman advised and leave the Eurozone. That would enable such countries to have a more competitive currency rate, making their goods and services more desirable to foreign buyers.

Sweden could more accurately be referred to as a social-corporatist economy, an extremely moderate form of socialism. Again, the Swedish government owns a smaller percentage of its national GDP than the US govt. does. I'm sure part of it is because of the US military, bust still.

Sweden is also very pro free trade, has voucher schools nationwide (whereas the US has them only in some local jurisdictions), two-tier health care, so it's certainly not socialist in the NDP-sense of the word.

Now Sweden does have high taxes, heavy investment in education, codetermination laws, etc. which are what make it socialist, but again with taken into account, it's more accurately social-corporatist, an extremely moderate form of socialism in that respect.

The NDP would not tolerate many aspects of the Swedish model.

 

[Liberalman]

I heard that most of the federal Conservative MPs pants were on fire

 

[gopher]

Sweden cut government spending and reduced taxes and this worked?

Well, Bush increased government size and spending, reduced taxes, and it failed. Even the far right Washington Times admits he did so:

Big government gets bigger - Washington Times


According to wiki, "As of 2010, total tax revenue was 45.8% of GDP, down from 48.3% in 2006". Thus, the tax decrease was miniscule and it still has the second highest tax revenue behind Denmark.


According to your article Bork has been finance leader since 2003. But look at Sweden's growth:

It's growth was higher before he joined the government. So how does this prove the basis of your article???

Also, if you at the comments from the readers, it shows that the Swedish government reduced the military - this is how they reduced government. How many conservatives would stand for that here???

 

[Bar Sinister]

Sweden could more accurately be referred to as a social-corporatist economy, an extremely moderate form of socialism. Again, the Swedish government owns a smaller percentage of its national GDP than the US govt. does. I'm sure part of it is because of the US military, bust still.

Sweden is also very pro free trade, has voucher schools nationwide (whereas the US has them only in some local jurisdictions), two-tier health care, so it's certainly not socialist in the NDP-sense of the word.

Now Sweden does have high taxes, heavy investment in education, codetermination laws, etc. which are what make it socialist, but again with taken into account, it's more accurately social-corporatist, an extremely moderate form of socialism in that respect.

The NDP would not tolerate many aspects of the Swedish model.

I am quite well aware of the structure of the Swedish economy and agree with you that total government ownership is lower than that in the US and Canada. However, there are many aspects to socialism and Sweden is in the forefront when it comes to implementing many of them. For example, Sweden is very highly unionized; in fact it is illegal for most companies not to have unionized employees. Not only that, but it is a legal requirement that the boards of directors running Swedish companies have labour representatives on them. I have details of these laws listed below. I note that you referred to one of them (Codetermination) in your post, but I expect most people will not know what that is.

The Employment (Co-Determination in the Workplace) Act establishes rules for relationships and negotiations between employer and employee organizations. It requires employers to notify trade unions with regular information about the company’s financial status and personnel policies, as well as about any downsizing or restructuring plans. The act also contains agreements regarding meaningful work tasks, often including mandatory skill development regulations.
The Trade Union Representatives (Status at the Workplace) Act was drafted to protect trade union representatives, ensuring their job security and making it easier to perform their trade union duties. It guarantees union representatives’ wage and employment benefits and forbids dismissal in cases where the representative is necessary at the workplace.














In addition, the government of Sweden practices what is called indicative planning. This is a form of economic planing in which the government sets out long term goals and then moves towards them by the use of tax incentives and disincentives. This is quite different from the ad hoc economic planning of the US and Canada. In fact there is so little long range economic planning in the US and Canada that it can hardly be called planning.

These factors, coupled with a superb job-retraining program, generous social benefits and high level of taxation definitely put Sweden of the left side of the political spectrum.

However, as in all things it depends on how the word socialism is defined. Are public schools socialist? Are libraries? How about public highways and public transport? How about recreational centres and public parks? A century and a half ago all of these things would have been considered socialist to some extent. Do they still qualify?

 

[gopher]

Locutus,

It appears that the premise behind your article has been refuted. What is your reply to this?

 

[Locutus]

Locutus,

It appears that the premise behind your article has been refuted. What is your reply to this?

You have me confused with someone who cares. :lol:

But by all means, contact the author if that's your thing:

Warren Beatty is a former university professor of statistics and 22-year army veteran. | Warren Beatty wbracing@hotmail.com


Oh, and don't get all mad or anything. ;-)

 

[relic]

Ever heard the expression,"even a turkey can fly in a hurricane"? What's saving Canada now is rules that were put in place pre harper,and the natural resourses.Don't delude youselves into thinking it's tory management that's keeping us afloat,harper is more albatross than bird of paradice.

 

[gopher]

You have me confused with someone who cares. :lol:

But by all means, contact the author if that's your thing:

Warren Beatty is a former university professor of statistics and 22-year army veteran. | Warren Beatty wbracing@hotmail.com


Oh, and don't get all mad or anything. ;-)

Get mad? LOL!

I guess this means your opinion changed when the premise of your thread was proven wrong. OK. No problem.