“MUST-READ: Incredible evidence the U.S. and Europe are making a horrible mistake”
Posted May 10, 2012on:
How many times must the fact that lowering taxes and allowing people to decide how and where to spend their money actually grows the economy? Here is another country that has come thru the current mess the world is in by lowering taxes. Will we never learn!!? BB
MUST-READ: Incredible evidence the U.S. and Europe are making a horrible mistake Wednesday, May 09, 2012
Text Size:From Carpe Diem:
From the U.K. Spectator’s report on the amazing success of supply-side economics in Sweden and finance minister Anders Borg, the man behind it:
“When Europe’s finance ministers meet for a group photo, it’s easy to spot the rebel — Anders Borg 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.
All this has taken Borg from curiosity to celebrity. The Financial Times recently declared him the most effective finance minister in Europe.
“Everybody was told ‘stimulus, stimulus, stimulus’,” he says — referring to the EU, IMF, and the alphabet soup of agencies urging a global, debt-fueled spending splurge. Borg, an economist, couldn’t work out how this would help. “It was surprising that Europe, given what we experienced in the 1970s and ’80s with structural unemployment, believed that short-term Keynesianism could solve the problem.” Non-economists, he says, “might have a tendency to fall for those kinds of messages.”
He continued to cut taxes and cut welfare-spending to pay for it. He even cut property taxes for the rich to lure entrepreneurs back to Sweden. The last bit was the most unpopular, but for Borg, economic recovery starts with…
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