CARPE DIEM: Anti-Keynesian Supply Side Tax and Spending Cuts in Sweden, and the Finance... - 0 views
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Gary Edwards on 09 May 12Sweden's Finance Minister Anders Borg is proving that Krugman and all those Keynesian big time stimulous spenders are wrong. Reagan supply-side economics works every time it's tried. And Sweden is proving it every day. Instead of borrowing to stimulate, Borg flattened and cut taxes while gutting unsustainable government welfare spending. Put the productive resources in the hands of those who are productive, and magic happens. Capitalism has a home in Sweden, of all places. excerpt: "When Europe's finance ministers meet for a group photo, it's easy to spot the rebel - Anders Borg (pictured above) has a ponytail and earring. What actually marks him out, though, is how he responded to the crash. While most countries in Europe borrowed massively, Borg did not. Since becoming Sweden's finance minister, his mission has been to pare back government. His 'stimulus' was a permanent tax cut. To critics, this was fiscal lunacy. Borg, on the other hand, thought lunacy meant repeating the economics of the 1970s and expecting a different result. Three years on, it's pretty clear who was right. "Look at Spain, Portugal or the UK, whose governments were arguing for large temporary stimulus," he says. "Well, we can see that very little of the stimulus went to the economy. But they are stuck with the debt." Tax-cutting Sweden, by contrast, had the fastest growth in Europe last year, when it also celebrated the abolition of its deficit. The recovery started just in time for the 2010 Swedish election, in which the Conservatives were re-elected for the first time in history.