It's so annoying when people come here without reading anything from the main site first.
Lockesthenes: Sweden has regulation, while the U.S did not before the crisis. Thus why deregulation blew our markets to hell.
Sweden has regulation, while the U.S did not before the crisis. Thus why deregulation blew our markets to hell.
Here you go:
Code of Federal Regulations
Happy reading.
'It is difficult to imagine any normal person wishing to meet Marx for a third time.' - Alexander Gray, The Socialist Tradition
How wasn't deregulation the cause, if the lack of oversight allowed such investments to enter into toxic assets? Thus becoming a systematic risk?
So you wilfully ignore all the elements of state control (e.g. over interest rates, implicit and explicit guarantees by the state of failing banks &c.)? Yes, you do. The burden of proof is on you statist idolatre. And by the way ban dodging is not very clever.
To darkness I condemn you...
Norway reelected their social leaders yesterday last night.
alimentarius: Norway reelected their social leaders yesterday last night.
Some people just never learn.
The liberal people's party of Norway seems a good political platform for libertarian ideas though.
Sweden and Denmark is not as most US liberals and socialdemocrats think. It was up until 197o but after that it went south. In exactly the same way the US will go if you follow the Scandinavian Tax and Spend formula, raised the taxes by 50 % and increased the benefits by 100 %.
The cost can be shown in thsi latest report from KPMG. They show that Sweden and Denmark has the highest overall tax burden among 86 nations as well as the highest marginal taxation, not only that it kicks in at very low levels of income. Sweden will 2010 pass Denmark.
Denmark has the world’s highest marginal taxation of 62.3 % followed by Sweden 56.7 %. For incomes above USD 100.000 dollar Sweden is in the lead.
The average marginal taxation is 28.9 % in the world. The EU average is 36 %. It is about the US average if you include State marginal taxes.
Sweden and Denmark suffer from the Laffer curve i.e. the more taxes are raised the less taxes is raised, the growth in the economy as well as employment is hit. Between 1970-1990 the Laffer effect was extremely strong. Sweden fell from the 4th richest country with the world’s best welfare state to a measly 17th and a mediocre welfare system at best. The Social Security system had become bankrupt. In the early 90s Sweden cut social security benefits by some 30 % and fully funded and privatized it. It deregulated, implemented school vouchers for private schools as well as sold out all public utilities and banks. The marginal taxation was cut from 75 % to 50 %. Denmark did basically the same. Still according to a recent study Sweden and Denmark still suffers from the Laffer effect i.e. should not raise taxes since they are contra productive.
According to the German study the US can raise taxes by 30 % on income and 6 % on capital gains without the risk of the Laffer effect. However as Sweden’s and Denmark’s example when you raise taxes close or above the Laffer maximum curve you tend to keep raising them to pay for all the reforms you put in.
The US will probably have to raise taxes by 10-15 % to pay for Long Term Care and Medicare as well as have to cut Social Security benefits by 30 % and stop the PayAsYouGo system to a fully funded partially privatized system.
The worlds highest marginal taxation
1. Denmark (62.3 %)2. Sweden (56.7 %)3. The Netherlands (52 %)4. Japan (50 %)5. Austria (50 %)6. Belgium (50 %)7. Ireland (46 %)8. Israel 46 %)9. Australian (45 %)10. China (45 %)11. Croatia (45 %)12. Germany (45 %)
World average: 28.9 %EU average: 36 %
The worlds lowest marginal taxation
Bahamas (0 %)Bahrain (0 %)Cayman Island (0 %)Kuwait (0 %)Oman (0 %)Qatar (0 %)Saudi Arabia (0 %)Bulgarian (10 %)Kazakhstan (10 %)Paraguay (10 %)Russia (13 %)Costa Rica (15
Could we get a link to this info please
From Mathias Trabandt and Harald Uhlig, there is a new study:
We characterize the Laffer curves for labor taxation and capital income taxation quantitatively for the US, the EU-14 and individual European countries by comparing the balanced growth paths of a neoclassical growth model featuring ”constant Frisch elasticity” (CFE) preferences. We derive properties of CFE preferences. We provide new tax rate data. For benchmark parameters, we find that the US can increase tax revenues by 30% by raising labor taxes and 6% by raising capital income taxes. For the EU-14 we obtain 8% and 1%. Denmark and Sweden are on the wrong side of the Laffer curve for capital income taxation.
I guess some of those countries should cut their tax rates. The title of the paper is How Far Are We From the Slippery Slope? The Laffer Curve Revisited. You'll find some ungated versions here.
Posted by Tyler Cowen on September 16, 2009 at 07:38 AM
On comparison between the EU and the US as well Sweden and the US you can read the 2 following texts by 2 leading Swedish Economists:
Fredrik Bergström & Robert Gidehag
”Sweden vs. USA, an analysis of the importance of growth” 2003
“EU vs. USA, an analysis of the importance of growth” 2003
Unfortunately they are no longer available online in English and only the latter is available online in Swedish. I have a pdf hardcopy in English of EU vs. USA.
However you can read a commentary made by the Wall Street Journal:
Europe vs. America Germany edges out Arkansas in per capita GDP.
But what about equality? Well, the percentage of Americans living below the poverty line has dropped to 12% from 22% since 1959. In 1999, 25% of American households were considered "low income," meaning they had an annual income of less than $25,000. If Sweden--the very model of a modern welfare state--were judged by the same standard, about 40% of its households would be considered low-income.
In other words poverty is relative, and in the U.S. a large 45.9% of the "poor" own their homes, 72.8% have a car and almost 77% have air conditioning, which remains a luxury in most of Western Europe. The average living space for poor American households is 1,200 square feet. In Europe, the average space for all households, not just the poor, is 1,000 square feet.
So what is Europe's problem? "The expansion of the public sector into overripe welfare states in large parts of Europe is and remains the best guess as to why our continent cannot measure up to our neighbor in the west," the authors write. In 1999, average EU tax revenues were more than 40% of GDP, and in some countries above 50%, compared with less than 30% for most of the U.S.
Thanks for the contributions, Homo Illuminatus.
Mises Community Natural Rights Discussion Group
Ok, I am new to the site, so forgive me if I say or do something wrong here.
It is my understanding, that these Quasi-socialist states are able to prosper because at least a portion of their economy is in fact capitalist in nature. Just like America, since say 1913, it is because of those capitalist areas of the economy that we grow despite the enhanced regulation, not because of them.
I recently debated with a gentleman from Denmark who is very happy with his socialist economy. He is going to college there for free. After much debating, he conceded that he in fact had far fewer choices in Denmark than we do here in America. That is what the bottom line essence of Capitalism is to me, the freedom of choices.
Makes me wonder if ignorance is indeed bliss, he is happy, and I stress about losing our economy to crazy Keynesians and Obamanomics. What a world we live in.
Justin:He is going to college there for free.
He is going to college there at someone else's expense. School is not free. Somone is paying salaries, materials and overheads.
I don't doubt that free riders feel pretty good about the trip.
Sorry to quibble, I am a stickler for this distinction. I really dislike when people say "free". I always remind them that someone is paying the costs, because the teachers, or doctors or whatever are not donating their wages for free.
If you find something evil that wobbles, push it. - Gary North
My apologies. It's kinda late here. You are absolutely right in correcting me. I sometimes need jumping on, I have to admit I was on a kind of high about making him concede. I did end up telling him that he didn't go for free actually, and I also got him to concede that point as well. If anything, him not being able to out debate me on these points leads me to one of two conclustions:
1) state schooling has failed again and not given him the proper tools to win in a debate
2) socialized economic systems are indefensible
I guess it's probably the ladder with the former as a side dish.
Justin:My apologies. It's kinda late here.
No need to apologize. You did well in your debate. It's my pet peeve about "free". When you point out how it is not free, people suddenly stop being so arrogant about how much their government does for them. Really takes the starch out of them IMO.
Sorry but this way of comparing is plain bullshit. Just compare some real-estate-dealers´offers on the web - and you will realize that you cannot compare on air-conditioning, sqarefeet and so on and blame the different system.
Include Japan or Switzerland - and it would become even more ridiciolous. Just have a look on a map!
USA: 9.161.924 km² - 305.548.183 Inhabitants -> 31 Inhabitants per km²
Germany - 357.104 km² - 82.002.356 Inhabitants -> 230 Inhabitants per km²
In order to compare somehow realisticaly - you would have to compare Germany to Maryland - even thoth the population-density of Maryland is 175 Inhabitants per km². Ok from this point we could for example compare the prices in Munic with the prices in Baltimore - even thogh Baltimore is smaller.
And even from this point you would have to think about the quality of the houses. In Germany most houses are build in bricks and concrete. These houses are built to last 100 years and longer.
If there are living many people on little space - this makes the prices rise! Not only the prices to buy a House.
I don't see your point?
US left liberals and Big Government statists always love to compare the US average to Scandinavia. Why do you find it bs when the comparison goes the other way?
The contention of the Swedish report is that poverty is relative to other peoples earnings and wealth, not an absolute i.e. poverty is in the eye of the beholder, a personal opinion not a fact. The report holds that a better way of understanding poverty is to measure living standards and housing standards.
Personally I agree that to compare Sweden and Germany to the US is absolutely misleading. The poorest states in the US, Louisiana etc. should be compared to the poorest and most corrupt EU countries such as Greece.
Sweden should be compared to Minnesota and New York, States with high marginal taxation and high overall taxes as well as very large public sectors and strong trade unions as well as large state entitlements programs.
Even given these comparisons the US leads but after Obama 2 terms the US overall will look much more like Greece than Sweden. Large corrupt government bureaucracies with little or nothing to show for all the taxes spent. Big corporations, Big Labor and special interest groups will have a field day.
US little hard working chickens will be screwed. My mother used to work for the government in Sweden during our crazy socialist years 1968-1993. Marginal taxation was for employees at 90 % and for self employed 105 %. So how did workers, small business owners, entrepreneurs and professional people react?
Blue and white collar workers started abusing the entitlement systems to supplement income and increase free time. If supplementing income by work they asked for money under the table. The Swedish Black Market sector grew like crazy. You couldn’t find a contractor that would give you a invoice or an estimate.
Small business owners transferred their earnings to Switzerland in suitcases and engaged in extreme tax evasion dn tax avoidance schemes. Tax fraud became a national pastime.
Entrepreneurs left Sweden by their own volition or hounded out by the IRS and the media.
My mother and her compatriots that couldn’t take balck money instead had their trade union extend their vacation time. My mother had 12 weeks paid vacation and for every hour working overtime she got three hours leave i.e. non of her colleagues worked more than 6-7 months a year. The rest of the time they hunted, took flying certificates and had 200 extra College credits each when they were not busy repairing their house and car.
Welcome to the US of the year 2016 but the difference is that instead of an non-partisan, non-corrupt bureaucracy denying special interests as in Sweden the US will have the South European version, Greece, Spain, Portugal and Southern Italy.
The lesson that left liberals and statists does not understand is that you cannot have extremely high taxes, a large entitlement program combined with corrupt bureaucracies and self serving partisan bureaucrats.
I've read this discussion very carefully and many times. very illuminating and, except for a few posts, very high quality. My compliments to the ones involved.
I only have one small thing to add, a minor correction if you like. While Southern Italy is surely very similar to Greece and the poorest parts of Spain the rest of the country doesn't fare much better. The central parts (Tuscany and Emilia-Romagna particularly) are called "the Red Regions" for reasons easy to imagine. While they like boasting "high living standards" a quick look at their hospitals and roads says it all. Then you have the Northern part. Though in a slow decline since the late '70s (caused by, you guessed it, increased taxation and legislation) we are the powerhouse pulling the rest of country, though we are quickly running out of steam. But do not believe for a minute that our situation is similar to, say Germany and France. We are very close to Sweden in the '80s, as rightly depicted by HI: high taxation, very powerful special interest groups (including omnipotent unions), rapidly deteriorating infrastructures etc. Add the fact that Italy is a state held together by an artificial and increasingly decrepit identity concocted in the late XIX century to keep together people who have always hated each other's guts (and we still do) and you get the picture.
Sorry for hijacking the thread and keep on rocking!
Yes, it's time for the Dr Goebbels show!
Kakugo:Add the fact that Italy is a state held together by an artificial and increasingly decrepit identity concocted in the late XIX century to keep together people who have always hated each other's guts (and we still do)
Don't worry about hijacking the thread. We're all interested in intelligent input. Now, I'm wondering, could you please expand on the above statement? I wasn't aware that there is some kind of conflict between Italians. Are Sicilians opposed to Venetians and Venetians to Romans, etc.?
As someone who has lived there and knows people who still live there I can vouch for that statement.
You can also read up on its history. Was only recently unified in the 18th century, the people speak their own dialects. I suppose in many cases it is similar to germany, I think the central government on a whole is just much weaker.
Ludwig von Mises Institute | 518 West Magnolia Avenue | Auburn, Alabama 36832-4528
Phone: 334.321.2100 · Fax: 334.321.2119
contact@Mises.org | webmaster | AOL-IM MainMises
Mises.org sitemap