Why America Should Be More Like Sweden (It’s Not What You Think!)

Posted on by Lone Candle

“the Swedes feature partial privatization in their pension system, tie benefits to contributions, and vote each year on supplemental benefits based on demographic and economic conditions, all while balancing their budget.
By rejecting socialism and embracing privatization as well as mechanisms to prevent overspending, the Swedes demonstrated that reforming entitlement programs in a fiscally prudent way is not a pipe dream after all.

Conversely, U.S. Social Security benefits are guaranteed regardless of economic or demographic conditions. Social Security, among other programs, is deliberately excluded from our government’s normal budgetary process. Social Security and other entitlement programs are considered “mandatory spending,” in which funding is provided without congressional debate or action.

Putting entitlement spending on autopilot means the federal debt, currently standing at $34 trillion, will only grow. Mandatory spending, which includes, but is not limited to, Social Security, accounts for about two-thirds of government spending. The annual total dollar amount of mandatory spending increases by an average of about 10 percent per year.

The level of automatic mandatory funding demonstrates the staggering extent of the federal government’s spending problem. Last year’s tax revenue, about $4.4 trillion, just barely pays for mandatory entitlement spending. Therefore, much of the remaining $1.7 trillion we spend on our military and other programs is funded with borrowed money.”

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“Sweden previously promised a socialist pension program similar to Social Security. Under that retirement system, Swedish citizens were, subject to certain requirements, entitled to a universal basic and supplemental income.

Facing alarming projections of insolvency in the 1980s, Sweden established a commission to review the pension program’s fiscal sustainability and develop options for reform.

Sweden’s efforts were not immediately successful. The pension commission presented its recommendations during an economic downturn in 1990, which the Swedish parliament rejected. But Sweden continued to seek a solution. A new working group, comprised of representatives of each of the seven political parties, found that the aging Swedish population, inflation, and rising unemployment eroded the sustainability of the Swedish pension system. The working group also found that, barring reforms, the payroll tax would need to rise from 18 percent to 30 percent to support the program. The Swedes rejected both an initial set of reforms and a confiscatory tax increase.

So how did the Scandinavian country get back on the path to a sustainable pension system?

The Swedes’ pension reforms worked because they abandoned many of the socialistic aspects of its previous system. Sweden rejected Social Security–like defined benefits in favor of a defined contribution rate. Sweden also introduced some privatization into the system, which empowers beneficiaries to determine how to invest their retirement funds and take an active role in planning for their own future.

Critically, the new system features a mechanism called the “brake,” which is designed to prevent overspending by automatically preventing benefits from growing quicker than contributions.

The new Swedish system was fully implemented in 2003, and it has withstood the test of time. Swedish benefits have consistently increased, and their pension program has featured a surplus in all but three of the last 20 years. For the last 10 years, the program experienced a consistently growing surplus. Even during the 2008 financial crisis and the COVID-19 pandemic, the Swedish pension system remained strong. Conversely, the nonpartisan Congressional Budget Office projects that the Social Security’s retirement account will be depleted in 2032.

Today, the Swedish system consistently ranks among the world’s best-performing retirement income programs. This feat was accomplished because Sweden recognized the most socialistic aspects of the program were failing and implemented reforms to avoid the same problems that plague Social Security: unsustainability and passing the costs of overspending to future generations.

America’s officials should act like adults and acknowledge that Social Security can only be strengthened by ending the problem of uncontrolled costs. In this sense, maybe America should be more like Sweden.”

https://reason.com/2024/01/13/why-america-should-be-more-like-sweden-its-not-what-you-think/

The Newly Unveiled HHS Rationale for Rescheduling Marijuana Underlines Drug Warriors’ Dishonesty

Posted on by Lone Candle

“it was clear that Biden did not expect HHS to confirm its previous position that marijuana belongs in Schedule I. He expected HHS to recommend that marijuana be moved to a lower schedule, which is what it ultimately did. As the details of the HHS recommendation clarify, that decision was not based on new scientific evidence. It was based on a reinterpretation of the criteria for Schedule I that could have been implemented much sooner if HHS and the DEA had been open to it, or if a previous president had encouraged it.”

https://reason.com/2024/01/15/the-newly-unveiled-hhs-rationale-for-rescheduling-marijuana-underlines-drug-warriors-dishonesty/

Does Ranked Choice Voting Disenfranchise Minorities?

Posted on by Lone Candle

“McCarty concluded that minority voters exhaust their ballots at higher rates when there is not a candidate of their same ethnic group. But ballot exhaustion does not necessarily mean a voter didn’t vote their conscience. “We simply cannot assume that not using every RCV choice amounts somehow to being deprived of influence,” says Walter Olson, senior fellow at the Cato Institute’s Robert A. Levy Center for Constitutional Studies. He characterizes the choice not to rank all candidates as “the functional equivalent of not choosing to vote in a runoff when no candidate you found acceptable made it to the final round.”
Will Mantell, FairVote’s communications director, agrees: “RCV actually makes more ballots count compared to single-choice elections or runoffs. It’s really hard to say that RCV doesn’t make more votes count in New York City, for example, when the last citywide primary runoff in 2013 had a 62 percent turnout dropoff from the primary to the runoff.””

https://reason.com/2024/01/16/does-ranked-choice-voting-disenfranchise-minorities/

20 Percent of Welfare Spending Goes to the Households Taxed To Fund It

Posted on by Lone Candle

“About one in every five dollars that passes through the federal welfare system ends up right back where it started, according to a new report.
It’s not robbing Peter to pay Paul. It’s more like “robbing Peter to pay Peter,” wrote the report’s author, Judge Glock, director of research at the Manhattan Institute.

As the federal welfare state has grown to a point where many middle-class and even some upper-income households receive benefits, it has become more common for the same households to both pay federal taxes and collect federal transfer payments. Glock’s paper shows how significant that overlap is: About 20 percent of the annual funds in the federal welfare system are simply returned to households that paid that amount in federal taxes.”

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“Dollars returned in the form of welfare transfers are often restricted—food stamps can only be used for certain purchases, for example—in ways that dollars never taxed away from someone’s paycheck aren’t. Or the funds might only be available at certain times of the year, as is the case with welfare delivered via refundable tax credits. There’s also the cost of cycling that money through the system: paying for the IRS to collect it and various bureaucrats in other places to oversee its return.”

https://reason.com/2024/01/18/20-percent-of-welfare-spending-goes-to-the-households-taxed-to-fund-it/

California’s Attack on Gig Work Predictably Drove Workers Out of Jobs

Posted on by Lone Candle

“California’s attempt at forcing gig workers to become traditional employees backfired by driving many of those workers out of their jobs.
In the wake of a new law (Assembly Bill 5) that was intended to reclassify many independent contractors as regular employees, self-employment in California fell by 10.5 percent and overall employment tumbled by 4.4 percent, according to a study released Thursday by the Mercatus Center, a free market think tank housed at George Mason University. In professions where self-employment was more common, the effects were more dramatic, and in some fields employment declined by as much as 28 percent after A.B. 5’s implementation.”

https://reason.com/2024/01/18/californias-attack-on-gig-work-predictably-drove-workers-out-of-jobs/

Ron DeSantis Could Have Run on a Message of Freedom

Posted on by Lone Candle

“it’s been impossible to escape the feeling that DeSantis’ notion of freedom extended only as far as the preferences of his political tribe.
DeSantis could have been something different. Indeed, he once was a quite different politician. As a backbench congressman during the Obama years, DeSantis was part of the so-called “tea party” movement that pushed for smaller government, less spending, and, yes, more freedom. In his first political book, Dreams From Our Founding Fathers, DeSantis argued for the merits of constitutionally limited government. During his three terms in Congress, DeSantis backed plans to balance the budget and reform entitlement programs, and he spoke of the need to restrain Washington’s “put it on the credit card mentality.” As governor of Florida, he was relatively restrained in imposing COVID controls—and stood by that approach when large swaths of the media denounced him for it.

“But as governor, DeSantis also earned a reputation for tax-funded political stunts and for expanding government with little regard for civil liberties.

Remnants of the earlier DeSantis were still evident during his governorship and his failed bid for the presidency. The two halves of DeSantis’ personality sat awkwardly alongside one another, and that’s surely part of the reason why he struggled to connect with voters. His message of freedom was fundamentally incongruous with much of what he’d bragged about accomplishing in office.”

https://reason.com/2024/01/21/ron-desantis-could-have-run-on-a-message-of-freedom/