Nina Schmidt, Danish professor in economics, calculated recently that every Danish baby girl born now, is expected to cost the government almost 300,000 dollars over her lifetime, and that every baby boy born, will contribute with merely 110,000 dollars.
https://www.mm.dk/kvinder-er-en-underskudsforretning (in Danish).
The Danish government is running huge deficits on the budget and it is hard to see how that will change in the coming years. Had it not been for the oil and gas in the North Sea, which peaked in 2004 and 2000 respectively, we would have been in a much worse situation.
The Danish version of the Nordic model is not sustainable. Not sure how it is in the other Nordic countries.
Life is so much more than being a profitable servant. The Danes have more than enough food to feed themselves and enough houses to shelter everyone. Ensuring those basic needs, food and shelter requires at most 10% of the workforce. The remainder 90% can be allocated to schools, hospitals, retirement homes, tv production, professional athletes, accountants, hairdressers, etc.
There is no shortage of either resources or labor. The only problem is how it is allocated.
> Life is so much more than being a profitable servant.
It is. So a lot of people rightfully feel a bit screwed over going to work, having 56% marginal tax rate siphoned directly off the paycheck and then another 25% VAT at the till (no "essentials" VAT rate, all is 25%). That is on top of some of the most expensive groceries anywhere in Europe.
The system is setup to benefit those who spread their careers evenly over as many years as possible - indeed, it's very well tuned to make that life very comfortable. But save up for a few years, take a year off, be an entrepreneur? You'll get screwed on all fronts.
The the extend the "servant" idiom is useful, if you work in Denmark, you're as much a servant to the system as you'll ever be.
It's going to get a lot worse over the next decade when the baby boomers begin retiring. All those 2020 plans you're constantly hearing about? Not a random date.
How did you end up with 110k USD? GDP per person is ~56k (assuming 0% growth over lifetime), which means with danish taxes there is quite a bit over 100k USD contributed to the government on average. Your numbers sound incredibly fishy (and no, I don't read danish)
Nothing fishy about her numbers. These are net values. Both men and women contribute in their (best) working years, but as children and young adults, and again at old age, they cost more.
If they really cost only 300k USD/lifetime (does not sound that big), they definitely pay over 110k USD/lifetime. 56k is GDP, but that's divided by all (elderly and children too), so a dane is earning like 90k USD/year, out of which he pays 20-30k in taxes (there is more than just income tax). Average dane definitely works over 10 years. Hence the figures are fishy.
Nina Smith was showing gender differences. That's why she split the data up on genders. One of her conclusions was that the traditional family roles, in which the husband supports the wife, has been taken over by the welfare society so that the woman is now supported by the government.
There are many reasons for this difference. First of all, men still tend to seek more managerial positions and jobs in the private sector, making more money. Women have more part time jobs and jobs in the public sector. As Denmark taxes income on a progressive scale women end up paying less tax this way. Another reason is that women live longer and thus have more expensive retirements.
Leading the article with Britain under Thatcher as - presumably - a good example (of Government reform).. Not their brightest move to anyone British that grew up in the 80's and not in the "elite" classes. I was not compelled to read further, which is a pity, since the Economist can have some quite incisive articles sometimes.
But then again, I guess I'm not their target audience. I'll try and read it again, once I've stopped gnashing my teeth :/
As a Swede that's seen the change of the country growing up I couldn't stand this propagandic piece of nonsense. This article is clearly a right-wing view on what makes a country prosper.
Crime is up mainly because economic differences are bigger now than ever before in my lifetime. My children are going to grow up in a country fixated on doing budget cuts in the government spending. Sick people are no-longer supported by the government and cancer patients are being forced to look for work. Sweden haven't had this many homeless people for decades. This is not a society with moral standards anymore.
You are right that crimes are up*, and theft seems to be one category that has increased[2]. Don't know whether it's because of economic differences though.
That sick people aren't supported by the government and that cancer patients are being forced to look for work is a bit of an exaggeration.
Also, I'd say the main point of the article isn't that Sweden is heaven. Rather, it's trying to highlight some things that has worked well in Sweden (and other Nordic countries), but the article also points out quite a few bad things.
Sweden has many challenges ahead, and some things are worse nowadays compared to 20-30 years ago. Increased crime is certainly one of them. But, there are also things that have improved considerably, our debt is lower now than it used to be, we can still afford a public -- which I'm dearly happy for.
I'd say the article is fairly balanced, but I'd prefer a more critical view on the privatisation of the public sector. Some things have turned out well, but many haven't. There is a Swedish expression for naive, 'blue eyed' -- that word sums up many of our recent privatisations.
"Don't know whether it's because of economic differences though."
Correlation may not imply causation, but it's a pretty good hint at the directions in which you might want to look before you eliminate them as causes. Disparity does seem to associate closely with a lot of social issues, including property crime—closely enough that it's probably unwise to ignore it.
The pathological hate for even a simple mention of Thatcher prevalent in Britain is really quite amusing. When Thatcher took over in Britain, a big, sclerotic, hugely inefficient state was fait accompli. She slaughtered some holy cows and introduced significant reforms (which is all she's take to task for in the article). Was the alternative to these harsh reforms a land of milk and honey? The country was on the brink of bankruptcy (given ~30 years of deeply incompetent governance), something had to give.
The fait accompli in the Nordics is that of a state that never stops growing in size. In Denmark, the political debate, even on the most nutty right-wing fringe, is limited to discussing limiting the rate of growth. The previous liberal prime minister actively boasted the high rate of growth in the public sector. This is a reflection on the voting population: A large majority of voters have a direct financial dependency on the state through employment or by being a benefits recipient.
Not sure the there is a parallel in more than coincidence, but when Ed I Koch took over mayorship of New York City in the late 70s, the city was in financial ruin, on the verge of bankruptcy and the (north american) liberal (progressive) Koch also took deep cuts to quite a few sacred cows.
These kinds of actions were one of the alternatives given the macroeconomic conditions --The UK had the whole post-Empire implosion psyche to deal with as well.
the political debate, even on the most nutty right-wing fringe, is limited to discussing limiting the rate of growth. The previous liberal prime minister actively boasted the high rate of growth in the public sector. This is a reflection on the voting population: A large majority of voters have a direct financial dependency on the state through employment or by being a benefits recipient.
I had to check twice that you are referring to Denmark and not Greece. I guess the crucial difference is the amount of corruption and tax evasion.
Magie wasn't voted into power over and over by 'the elite classes'. The fact is we had no credible alternative at the time. Michael Foot's Labour Party? Really?
We still have fundamentally the same economy she built, and it's served us well. Thank goodness New labour had the good sense and survival instincts to essentially leave it well alone. Apart from bankrupting us of course, but hey, plus ça change.
Credible alternatives? Well, IIRC there was a Liberal party.. It's debatable that they would be considered credible, but an alternative they might have been, but then the voting system in place.. I leave it to the reader to decide if there is (or was) any actual chance of change..
Of course, you are right that the easily manipulated helped vote Magie (sic) in again, and I'm sure rousing support for a war never really helped the chances of the Conservatives in winning a second election (the Falklands "war" for those who do not remember the past). Nationalistic pride being what it is, of course.
The economy she built up and which is still in place.. I'm not sure who the "us" to whom you refer actually is, and I'm not convinced about the degree of "wellness" that it has provided, but perhaps I'm just being overly cynical?
If the alternative to letting that sector fail was endless propping up in the pre-Thatcher sense, then yes, it's served Britain well. It's regrettable, but the alternative isn't too bright either.
It might be so that there's a lot of clever Swedes living in London, but as far as I know Stockholm has a rather strong entrepreneurial scene. In my view, the main reasons why a Swedish entrepreneur wouldn't settle in Sweden is because of the high expenses when it comes to housing and consumption; not because of a high tax rate or other directly politically controlled factors per se.
Swedish entrepreneurs get many things in return as well. First of all, because the government covers most of the financing of studies, they don't get out of university with a significant study debt. This is great, because debt inhibits taking risks (i.e. becoming an entrepreneur.) Also, where most startups fail, an 'unfortunate' Swedish entrepreneur has a decent safety net he can count on.
Providing the example that Sweden is cutting on its government expenditure, in order to convince readers of the idea that small government is good is just wrong. Due to the differences in welfare state, a baby born in Sweden has a much greater probability of having good prospects than a baby born in the US or the UK.
Yes, more or less. People who care about tax go to Malta. There's also a lot of Swedish entrepreneurs in Berlin and I'm not sure taxes are much lower there, but rents are.
Take a demographic that has little more than one child per woman fertility rates, then, with per capita debt double what you have in the US achieve spectacularly glowing vital statistics (happy, healthy, literate people).
Again you have almost two adults per child, their spending plus the spending of the state which, overall (despite recent belt tightening) is twice per capita what you have in the US. Throw in a culture that's been largely mono-ethnic and with a population level that looks like a single relatively small State in the US and you have something that looks pretty right now but is completely unsustainable and will collapse a la Greece or worse as the present demographic of youth come into the workforce with massive debt obligations yet with none of the options their parents had.
From Wikipedia: "Skype was founded in 2003 by Janus Friis from Denmark and Niklas Zennström from Sweden. The Skype software was developed by Estonians Ahti Heinla, Priit Kasesalu, and Jaan Tallinn, who together with Friis and Zennström were also behind the peer-to-peer file sharing software Kazaa."
All three countries lay claim to Skype, but the Skype main development centre (ie the juicy jobs) is (was? not sure after the sale to Microsoft) in Tallinn, and while Friis and Zennström met in Denmark, they'd moved to Amsterdam by the time they started work on Kazaa (from WP on Janus Friis).
But OH NOES, they are teh socialist!!11oneeleventy And we all know that socialism always fails because socialist governments go bankrupt; at least, that's what rags like the Economist have been telling me for the last 30 years.
<sarc>This is why free-market, no-social-services USA has such a low public debt/GDP ratio, whereas quasi-socialist (public health: boo!) Australia has high debt/GDP, and socialist hell-holes like Denmark have off-the-scale debt/GDP ratios.</sarc>
Just look at the numbers in my (highly debatable and somewhat cherry picked) loosely ranked list of least to most socialist countries.
DERP. Oh dear, the numbers appear to have little correlation with with how socialist the country is, but may be more related to how 'innovative' a country's banking sector is, how many 'state owned enterprises' there are, national demographics, corporate political capture, and how distorting the tax system is.
Even the neo-liberals at the Economist are starting to understand that government provided social services, transport, health, and education aren't the primary factor that sends countries broke. Perhaps one day they'll notice the elephant in the room: the banking sector.
2010 figures are a bit out of date given the deficits the US has been running (the US has risen over 100%). I think the Economist actually has noticed the banking sector (consider this invited column from 2010:http://www.economist.com/economics/by-invitation/guest-contr...). By and large, the shift in US politics to the right has the Economist looking like a left-of-Democrat newspaper these days. The idea that Obama is a "socialist" is, to anyone versed in a tiny bit of history or political science, laughable.
I believe The Economist paid lip service to the role of the financial sector in the collapse; but that's mostly my opinion; as you say, they definitely covered it to some degree. At least they're apparently starting to realise that chanting "cut public services" over and over isn't the answer.
One problem with the USA left-right false dichotomy is that when you pick a middle point between the Republicans and the Democrats, you end up with something that resembles no political party anywhere else (including in the USA's history); everyone else's right wing parties (and the Republicans in the past) resemble the Democrats or are even further 'left'.
As far as I can tell, there's almost no difference between Obama and (for example) Reagan based on the left/right scale; yet US conservatives generally idolise Reagan and demonise Obama. It's bizarre.
I read the entire article; your comment is pointless and unconstructive.
My comment wasn't especially well-worded or clear, but loaded with a fair amount of sarcasm which some people have trouble with, so let me try again.
The Economist is a Neo-Liberal rag. 6 years ago, they would NEVER have published an article like this. Now they're starting to consider actual evidence and are seeing that government social services don't necessarily send countries broke.
However, they still have a long way to go before their analysis actually mean anything. Because they're still strongly attached to their broken neo-liberal world-view.
Ah, it was a meta-comment on The Economist's position.
If you had been straight-forward up front, that would have been much more interesting. Your initial comment was a mess. Not because I "have trouble with sarcasm", but because it had little direction and (to phrase it in terms you should understand) was so drenched in sarcasm as to have practically washed away the original message.
Guilty as charged on that one! I'm incoherent this morning, and feeling a bit off colour. Thanks for being classy and constructive (no sarc).
Here's a fun experiment. Go to the article, and search for the terms 'bank' and 'monetary'. 'bank' appears once within 'bankrupt', and 'monetary' doesn't exist at all.
Any article on this subject is meaningless without including those. The Economist is like an alcoholic who has recently started to admit that their behaviour is sometimes harmful, but hasn't yet come out and said "I'm an alcoholic".
Any article on this subject is meaningless without including those.
Eh, it's fine in my book. Banks may be the biggest issue, but so long as we're getting somewhere I'm happy with The Economist focusing on different aspects. Getting tunnel vision and saying "we must focus only on banks!" would ultimately be a loss, IMO.
Sweden was at 70% and went to 30% (now, 38% was in 2010 as you pointed out) because they cut governement spendings from 67% of the GDP to 49%.
Then you conveniently left Greece out of your list. You know that it did partially default and that it's going to default again right?
And Spain, why did you left Spain out? You know what's going in Spain right now? 50% unemployment amongst young people. Crazy high state budget deficit.
France is in deep shit right now and that 86% from 2010 was heaven compared to today. New car sales dropped year-to-year by 33% or so, companies of all sizes are closing left and right and they're heading for a default is they keep on that nanny state "here are more gifts for you so your sense of entitlement gets higher and you keep voting for us socialists". Because you know what? When a liberal president (Sarkozy) was cutting 180 000 public servant jobs at the very same time collectivities (run by the socialists) did create 500 000 jobs. 500 000 public servants jobs created by the socialists which now, of course, are explaining that Sarkozy did a bad job (he was president right in the middle of the financial crisis and it's all Sarkozy's fault).
The banking sector ain't the issue: we're first and foremost living, after the sub-prime crisis, a state debt crisis.
Why do we need to bail out banks? Because they have bad credits. Do you know the kind of bad credits they have now? State credits which states are never going to pay back.
And why do we have states that are going to be unable, just like Greece, to pay back their debt? Because they've been running budget deficits for years and years and years.
Honestly we're witnessing the failure of governments spending more than they rake in and socialo-communists are able to turn this around and to try to make us believe that it's the evil capitalists from finance who are responsible for all the world's problems.
I'm not buying it.
I confidently say that a nanny state with public spendings at 67% of the GDP like Sweden was before is too much. At 56% like France is right now (but it's going to skyrocket seen that they're not reducing public spending while their GDP is going to take a hit this year and lots of people from the private sector are now unemployed) it's too much too.
There has to be a certain % which is "right" and there may be some room but it's certain that socialists in France asking for more socialism are out of their minds.
The problem when you're "on the edge" with a % of public spendings so high that it's basically ruining the private sector and hence killing any innovation and with state debt around 100% is that you have not much room for maneuver anymore. All it takes is a little match and your beloved nanny state takes fire. Just like Greece. Just like Spain right now. Just like France tomorrow if they do nothing.
It's ugly and it's the fault of government running budgets on deficits.
The Danish government is running huge deficits on the budget and it is hard to see how that will change in the coming years. Had it not been for the oil and gas in the North Sea, which peaked in 2004 and 2000 respectively, we would have been in a much worse situation.
The Danish version of the Nordic model is not sustainable. Not sure how it is in the other Nordic countries.