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Take note, MrNoBug. 

Posted 5/11/2012 at 10:59:22 AM

willywonka4u
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Reviews: 7
First of all, Sweden's recent economic history is far different than ours. For the last 30 years they've had a high tax rate, and one of thee best social safety nets in the world. To put this in perspective, one of the things Sweden's gov't pays for is that they will pay for their citizens to go on vacation to get some sunshine in warmer climates. To put this in greater perspective, 80% of Swedish workers belong to a union, and 30% work for the public sector.

Despite this, as your own graph shows, Sweden's enjoyed greater GDP growth than the United States year after year.

http://www.nber.org/chapters/c5360.pdf

A better picture can be seen when we compare less socialistic economies with each other and compare policy differences in regards to austerity.

Here in the United States, we've resisted most attempts at austerity, and rather we passed an economic stimulus. In the UK, on the other hand, when Cameron became Prime Minister in May of 2010, the UK implimented stiff austerity measures.

We can now look at the results of these two policies. Below is a pic of two charts. One charts the GDP growth of the US and the UK. Take note what happened in the UK in 2010.

The second chart looks at initial unemployment claims in the USA, next to when the stimulus went into effect.

Yes, MrNoBug. Demand matters.



 

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