About six years ago, Economist Johan Norberg produced a documentary about Sweden’s recent economic transformations entitled “Sweden: Lessons for America.”

The program is very informative as well as entertaining, and will challenge what you thought you knew. You can still catch it on YouTube (highly recommended).

Sweden was one of the poorest countries in the world prior to 1850 when many fled to avoid the grinding poverty. (The first Swedes came to Jamestown in 1849; immigration locally continued through the World War I era.) Later, Sweden adopted free markets to become one of the richest countries in the world by 1960.

Norberg’s documentary is a cautionary tale describing how Sweden threw it all away for socialism and a welfare state, and hence became an economic disaster by 1975. The real story, however, is how Sweden successfully saved itself by evolving back to free markets.

Sweden’s self-rescue began around 1990 with massive reductions to their failed welfare state, and subsequent privatization of services previously monopolized by Government. They proved a country could recover from socialism if ideology was cast aside in favor of an adult conversation. Swedes decided individuals should have the freedom and responsibility to improve their own lives, and not live on government hand-outs.

Perhaps Sweden is a role-model for the U.S., but definitely not as the socialist utopia that the delusional Bernie Sanders and his ilk want to believe. Sweden’s miracle is that it democratically escaped “Democratic Socialism.”

Norberg notes that Sweden still has remnants of the old Welfare State left to deconstruct, but their success is stunning. On the other hand, the US has dropped to 26th in economic freedom over the last four years of increasing government intervention.

So, what did Sweden’s self-rescue look like? To start, they eliminated minimum wage. Now you get paid what your services are worth. This is a big hint for budding adults.

— Taxes: Sweden’s failed Welfare State was built on a tax-the-rich policy that featured rates as high as 139%; the more you produced, the less you had. This policy drove people and businesses from the country, thus undermining productivity and wealth. Subsequent reforms reduced the income tax to sane levels, so entrepreneurs were no longer chased away. Their economy now rewards high performers, rather than punishing them with taxes.

By comparison the American Left loves to claim “the rich don’t pay their fair share”, and clamors for more “Tax the rich!” Yet, IRS data shows that the top 1% already pay 46% of all personal income taxes, while over 40% of working Americans contribute nothing at all. Sweden’s taxes are structured so that almost everyone pays taxes regardless of income; hence everyone has a stake in fiscally responsible government.

Almost 50% of U.S. households have nothing to lose by demanding more free stuff from their taxpaying neighbors. No wonder our elections are so ugly – it’s about legalized theft by the government to give free stuff to people who did not earn it.

Not in Sweden.

Sweden also features low capital gains taxes, which encourages re-investment of profits and creates more jobs. Compare this to Democrats’ recent plan to increase US capital gains tax rates (already highest in the world), and their insane proposition to tax unrealized gains. Apparently, Democrats want to chase all production offshore.

— Fiscal Policy: U.S. national debt ($36 trillion) is so high that we spend more on interest payments than we spend on National Defense, and have been adding a record $2+Trillion per year in additional debt. Every child in the U.S. is born owing $120,000, whereas kids born in Sweden inherit per-capita debt less than 2% of that amount. But, Swedish debt declines every year because they actually pay down the debt left from the old welfare state and no longer borrow, unlike the US which keeps adding debt.

— Healthcare: Sweden dissolved its system of socialized healthcare by devolving responsibility to 21 small regions to manage healthcare locally. All Swedes pay for their basic health insurance, but their basic care is strictly limited and rationed (like Canada’s), which means long wait times and denial of coverage.

However, under the new system, Swedes who want more extensive coverage or shorter wait times can purchase care privately (unlike Canada, where you suffer or die because you cannot get government-denied care outside the Government system). Self-pay is critical when people are denied care under Sweden’s “universal” coverage. Swedes have choice, but must pay for their choices. Grown-ups understand that nothing is free.

— Education: Sweden dumped its Government monopolized education system and now allows children to choose between private schools and publically administered schools, with tuition paid in either case by vouchers. Public schools get no subsidy beyond vouchers. An increasing majority of Sweden’s schools are now privately run. This reform took control away from bureaucrats and teachers’ unions, and put control back in the hands of parents. Under-performing schools in Sweden now go out of business.

— Social Security Pensions: Sweden’s old system was an unsustainable, non-actuarial defined-benefit Ponzi-scheme, just like the US system is today. Sweden realized their system was guaranteed to fail, so they privatized it and put it on an actuarial basis using a defined-contribution system instead. Benefit levels now depend on individual contributions, and market performance. Unlike the US, Sweden does not print money to make Social Security payments. Retirees have a big stake in a healthy economy.

It has been known since the beginning (FDR-1933) that the US Social Security system was/is designed to fail, but our politicians do not have the integrity or courage to fix it.

— Regulation: Sweden’s economy was drowning in Government regulation which killed innovation and choked productivity, so they liberated themselves from it. Sweden is now a leader in product and business innovation. De-regulating will be critical for America’s future, but will be a major hurdle because of special interests.

— Sweden’s Lessons for America: If you want the best for everyone, individuals must have the responsibility to choose for themselves, and must earn what they consume. We must allow our best people to excel, and we must end the delusion that a generous welfare state is good for anybody. Swedes rescued themselves by radically culling their National Government and Welfare State. They had an adult conversation.

It is time for an adult conversation in the U.S. Are you listening, Bernie?

Michael Dee is a Silver Creek resident and Scott Axelson is from Jamestown.