Swedish Slump

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According to the Financial Times, Sweden in cutting its famously generous welfare benefits due to a long-slumping economy.

The weak international economy and uncertainty caused by war in Iraq has hit the country's biggest exporters, with companies such as Ericsson, Electrolux and SAS shedding thousands of jobs.

At the same time, public finances have been hit by dwindling tax receipts and soaring levels of sick leave. The surplus in the public finances is forecast to shrink to 0.4 per cent of gross domestic product this year, more pessimistic than the European Commission's estimate of 0.8 per cent. Central government will post a SKr21bn deficit, the first shortfall since 1997.

[Link courtesy of Free-Market.Net]

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  1. hey Geophile!

    yeah — i’ll look for some links. the racial problems are with the middle easterners who were imported in the 60s and 70s to do the jobs the swedes didn’t want to do. you see similar, but on a less-violent scale, in copenhagen.

    and i do believe, but i don’t have figures (there was something in the economist (ugh) recently about sick leave.

    one thing that i experienced often was hearing race-based jokes that simply aren’t appropriate in similar (preppy/grad student) social circles. a friend of mine who’s adopted is half vietnamese, half black american. whenever there would be the “black pig” comments, people would be quick to add, “but not you, John”.

    another one was the old “turn away” at nightspots.

    i felt that there was a definite “them and us” feeling that “integration” meant total adaptation without mixing and matching elements of the culture…

    (can’t find links in english now — will keep looking)

    cheers,
    drf

  2. To say that Sweden has bigger racial problems than other western countries with plenty of immigrants doesn’t sound like the Sweden I live in. I would say it’s the opposite, although I admit that the integration in for example suburbs outside Malmoe and Stockholm isn’t working well. But one has to keep in mind that Sweden doesn’t have any major (right-wing) populist parties with ?questionable? immigrant views, unlike countries like Denmark, Norway, Netherlands and France.

    And the crime rate in Sweden is low, compared to other countries. But since people here do trust the police a lot, more of the crimes are reported, and therefore available in statistics.

    One more thing, drf claims that the taxes here are more than ?3 out of 5 days of the week?, which I really don?t agree with. Without any statistics at the moment to support my arguments with, I would say that (by Swedish means) well paid academics in general pay about 50% in taxes, not more.

    Of course one can criticize Sweden for lots of things, and I?m no supporter of the current government, but to me Sweden is a ?safe? country with high taxes, not an unsafe country with 99 % taxes.

  3. hi carl,

    nothing was meant to suggest the final paragraph of “unsafe” and “99% taxes”. and nothing was to suggest there is more racism in sweden than in any other european country.

    and bringing up Malmoe, you probably remember the SV1 program from 1998 about the lost generation of immigrants who speak that cool mix of swedish and whatever home language it was — it wasn’t deadly crime, but fights, lots of break ins, smashed car windows, etc. (members.aol.com/gunbancon/Frames/WSJ.html) has part of an article from the WSJ about that particular crime statistic.

    while it’s definitely true that former prime minister bildt cut taxes back in 1991, where the taxes were really high, the tax burdon in sweden is sky-high in comparison to what we’re used to. (oh the monday… thursday is from the moderate’s 1998 campaign in skaane province in the south).

    so, the upper rates in 1999, per rsv.se, page 17 is 57%. so then we can look at VAT of 25%. and gas is what, 9 Skr/liter? so the energy, CO2, and VAT drive most of that. so yeah, i’d say there is a tax rate that is by the standards of here are high.

    “the rise and fall of the swedish model” and “beyond the welfare state” by Rojas have other info about this. (and the rather outdated “suedosclerosis” by wickman and stahl has stuff, too)

    so, Carl, please don’t get these comments as ripping sweden — it is an awesome country, but listining to how magical the welfare state is got a little tiring after a while.

    ha’ det godt,
    drf

  4. I’ve never been to Sweden personally, but I have spoken with several native Swedes (my wife’s grandmother is Swedish and had friends from Sweden visit often before her death).

    The impressions I got from my conversations included rampant racial problems revolving around immigrantion (and the contention that the immigration stemmed from the welfare state). But, the biggest complaints revolved around economic opportunity.

    One comment stood out in particular. An 85 year grandmother told me that if the US did not have immigration limits, every Swede with any ambition would have left by now. And that is pretty much a direct quote.

  5. Drf,

    You forget the fact that Swedish corporate taxes are low compared to other EU countries, but yes, Swedish taxes are high.

    With all respect to the 85-year-old grandmother, ‘brain drain’ isn’t a major problem in Sweden, in fact it’s no problem at all, and I don’t think it can be explained with other countries not accepting Swedes, but the fact that people here are pretty comfortable with their lives, for some reason.

    A bit off topic, Sweden, the Secret Files 🙂
    http://www.i.kth.se/carlar74/Sweden.htm

    Glad p?sk drf!

    Carl

  6. hi carl!

    that’s right — sweden’s corporate tax is, what, around 28% — if that’s the case, it sure is lower than most of the OECD (and here where it’s something like 35 or 40%).

    the secret file is absolutely hilarious!

    here in chicago it’s a great place for swedophiles, and actually, our wedding cake is from the Swedish Bakery! and the swedish-american museum is a fun place right next to the swedish market. in all, it’s in a neat area called Andersonville.

    tak for det og i lige m?de (god p?ske),

    drf

  7. I think the U.S. Corporate Minimum Tax is around 38-point-something percent as of now. Higher than in many European nations, yes.

  8. Swedes are becoming dominant in the area of stem-cell research. Or so I’ve read in the Economist.

  9. I’ve seen some Swedish meatballs lately. They’re pretty tasty, but I wouldn’t want to frolic naked in the snow. I like m?de take for that og.

  10. drf,

    Social ills occur because humans are the flawed creatures that they are.

  11. hey croesus!

    how true how true.

    and it seems where the state plans everything, the flaws get centralized and multiplied….

    cheers!
    drf

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