Saturday, October 17, 2015

The Cost Of The Scandinavia Welfare State

With Sen. Bernie Sanders (I/D-Vt.) running for president, he is the closest candidate that promotes a Scandinavia-style welfare state. it is worth analyzing what the cost of such a state is really like.
Scandinavia are also referred to as the Nordic countries of Denmark, Finland, Iceland, Norway, and Sweden.
The dirty little secret is that there is one three word reason the Scandinavian nations can afford a welfare state with a dab of capitalism.
The United States.
One of the reasons all the Scandinavian nations can do what they do is that they spend very little on defense spending. They all have small armed forces, including marginal navies and equally marginal air forces. They joined NATO and thus depend on the United States with it's still strong defense budgets and being the world's last superpower. Even with the cuts in defense spending, the Scandinavians can depend on the United States to help rescue them if there is some kind of military conflict.
So why is the Scandinavian model something the United States should avoid at all costs.
One, it is expensive with questionable results.
Two, it does not work.
Let's take a look at someone that lives in Denmark and see what it is like to live there.
In this article from earlier this year, the writer, Michael Booth, makes the point that American liberals/leftists love to point out the fact a McDonald's worker can easily make $15 an hour. And that more than 50% are sliced off the top in taxes. In fact for the average Scandinavian, as much as 60% of their income is taken away in taxes before they see what they can take home. In return there are a lot of "freebies" including free life-time education from cradle to grave. Same for health care for this is the land of single-payer, government-run health care. There are boatloads of mandates to the so-called private-sector economy that make it such almost in name only. Mandated, paid maternity leave for both parents, vacation time, sick time. You get the picture.
Here is an idea of the cost of living in the capital city, Copenhagen. This site says that of this writing, the Danish krone is 6.57 to the American dollar. So let's look at the link of the cost of living to see how much a very average car, a Volkswagen Golf costs. It is an average of 275,273 krone or $41,898.48c. How much does that car cost in the United States? At the Volkswagen website, the starting price is $20.175. It is more than half off the Danish price.
Why is that?
Ahh, there is the Value Added Tax, better known as a VAT that is cooked into the price of many items, especially big ticket items. This would be a way that big-government proponents would like to fund their plans to offer free college for all and even pay for single-payer healthcare. Of course the downside is that people will not be inclined to buy big ticket items if they do not have to.
But if you have that new Volkswagen Golf, how much is gas gonna cost ya? \
Well, almost triple the price of gas in the States. How about $6.34c a gallon? A fill 'er up? If the Golf has a 17.5 gallon gas tank, a cool $110.95c. Again, the tax is cooked in the price and thus it is hidden. Which is how it is in Denmark and the rest of Scandinavia.
Wanna take the family, mom, dad and two kids to the local McDonalds? Well, four combo meals cost a total of 280 krone or 70 krone each. That is $10.65c each. Roughly what one would pay at an airport in the States.
High taxation and low productivity are a disaster and only now, with the massive declining native birthrates, there seems to be a willingness of all Scandinavian governments to take in mainly Middle East, Muslim immigrants. New taxpayers.
But another downside is the fact that when all is taken care of you by the state, one's total well being cannot always be dealt with by the state.
According to Mr. Booth, the Scandinavian nations lead the world in suicides and the taking of anti-depressants. Also, and this is a surprise, these nations also are European leaders in violence against women. In this article, the Scandinavians are prolific binge drinkers. In Finland, Russian-adjacent, the leading cause of death among men in alcoholism. It is the second leading cause of death among women.
What Scandinavia celebrates is averageness. It does not really celebrate success. It is why those that can get the hell out. In many Scandinavian nations, leading hockey players that land NHL contracts know that if they stay citizens of their native land it will be massively taxed. Many, not all but many, realize their success is not something the home nation appreciates except as a big tax and thus many become American citizens.
Averageness leads to lack of innovation and or drive. In other words, Bill Gates could not really do what he did in any Scandinavian nation. Medical advances do not happen as often as in other developed nations. It is not to say some advances have not occurred in Scandinavian nations. But overall, even today, it is the United States that leads to innovation and yes, drive.
When Sen. Sanders touts Scandinavia, especially Denmark, he is asking for America to give up it's unique role in the world and celebrate averageness that we do not want to celebrate or make national policy.

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