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

“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.”

“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.”


Socialism Is Bad for the Environment

“”We tried socialism,” says Palmer. “We ran the experiment. It was a catastrophe. Worst environmental record on the planet.”
In China, when socialist leaders noticed that sparrows ate valuable grain, they encouraged people to kill sparrows.

“Billions of birds were killed,” says Palmer.

Government officials shot birds. People without guns banged pans and blew horns, scaring sparrows into staying aloft for longer than they could tolerate.

“These poor exhausted birds fell from the skies,” says Palmer. “It was insanity.”

I pointed out that, watching video of people killing sparrows, it looked like they were happy to do it.

“If you failed to show enthusiasm for the socialist goals of the party,” Palmer responds, “you were going to be in trouble.”

The Party’s campaign succeeded. They killed nearly every sparrow.

But “all it takes is two minutes of thinking to figure, ‘Wait. Who’s going to eat all the bugs?'” says Palmer.

Without sparrows, insects multiplied. Bugs destroyed more crops than the sparrows had.

“People starved as a consequence,” says Palmer. “People confuse socialism with…a ‘nice government’ or a ‘government that’s sweet’ or ‘made up of my friends.'””

“Many Chinese lakes and rivers are bright green. Fertilizer runoff created algae blooms that kill all fish. A study in The Lancet says Chinese air pollution kills a million people per year.

Wherever socialism is tried, it creates nasty pollution.

In the Soviet Union, Joseph Stalin wanted cotton for his army. His central planners decided it should be grown near the Aral Sea. They drained so much water that the sea, once the fourth biggest inland lake in the world, shrank to less than half its size.

“Soviet planners caused catastrophic environmental costs to the whole population,” says Palmer.

I push back. “That was then. Now the rules would be different. Now the rule would be: ‘green.'”

“All the time we hear socialists say, ‘Next time, we’ll get it right.’ How many next times do you get?” asks Palmer.”

“Capitalists destroy nature, too. Free societies do need government rules to protect the environment.

But free markets with property rights often protect nature better than bureaucrats can.”

“Capitalism also protects the environment because it creates wealth. When people aren’t worried about starving or freezing, they get interested in protecting nature. That’s why capitalist countries have cleaner air.

Also, capitalists can afford to pay for wild animal preserves.”

The Pilgrims Dreamed of Socialism. Then Socialism Almost Killed Them.

“the Pilgrims attempted collective farming. The whole community decided when and how much to plant, when to harvest, and who would do the work.”

“Soon, there wasn’t enough food.”

“no one wanted to work. Everyone relied on others to do the work. Some people pretended to be injured. Others stole food.”

“Young men complained they had to “spend their time and strength to work for other men’s wives and children without any recompense.”
Strong men thought it was an “injustice” they had to do more than weaker men without more compensation.

Older men thought that working as much as young men was “indignity and disrespect.”

Women who cooked and cleaned “deemed it a kind of slavery.”

The Pilgrims had run into the “tragedy of the commons.” No individual Pilgrim owned crops they grew, so no individual had much incentive to work.

Bradford’s solution: private property.

He assigned every family a parcel of land so they could grow their own corn. “It made all hands very industrious, so as much more corn was planted than otherwise would have been,” he wrote.

People who had claimed that “weakness and inability” made them unable to work now were eager to work. “Women now went willingly into the field, and took their little ones with them to set corn,” wrote Bradford.

The Pilgrims learned an important lesson about private property.

Unfortunately, people keep repeating the Pilgrims’ mistakes.”

With Lula’s Win in Brazil, the Left Dominates Latin America

“With Luiz Inacio “Lula” da Silva’s narrow victory over president Jair Bolsonaro in Brazil—the two-time former president defeated the incumbent by a 1.8 percent margin (50.9 to 49.1)—the Latin American left has completed its strategic dominance over the region’s seven largest countries.
In the 2000s, much was made of Latin America’s so-called “Pink Tide,” which began with Hugo Chávez’s first electoral victory in Venezuela (1998) and da Silva’s first term in Brazil (2002–2006). There followed an unprecedented rise of left-wing governments across the region. However, there were still important holdouts at the time; Mexico and Colombia didn’t veer left at all; Chile maintained its post-Pinochet social democracy; Peru’s original “Pink Tider,” Ollanta Humala, initially scared the markets in 2011 but proved to be mostly moderate in power.

By late 2022, however, hard leftists—often in cahoots with local communist parties—had handily won the last elections in each of these countries and in Argentina, which returned to Peronist Kirchnerism in 2019. Bolsonaro was the last right-winger standing”

When Karl Marx Made the Case for Capitalism

“According to Marx, history unfolded in a grand series of stages, each defined by its dominant mode of economic production and each specifically arising to replace the one that preceded it. “In broad outlines,” he wrote in the preface to A Contribution to the Critique of Political Economy, “ancient, feudal, and modern bourgeois modes of production can be designated as progressive epochs in the economic formation of society.” Capitalism, in other words, was a historically necessary step in human progress.
The great revolutionary forces unleashed by capitalism, Marx thought, would in turn form and shape a self-aware proletariat class that would ultimately lead humanity into a glorious communist future. But that would happen only after capitalism had worked its magic. “No social order ever perishes,” Marx maintained, “before all the productive forces for which there is room in it have developed.””

“Marx not only welcomed capitalism’s creative destruction of feudalism and slavery; he recognized and even championed capitalism’s essential role in human advancement. With free labor on the march, Marx argued in his 1861 essay “The North American Civil War,” the peculiar institution faced ultimate extinction “according to economic law.””