Sweden in the 70's during the radical years raised the taxes overnight by 50 %, increased public spending by 200 %. It lead to extreme marginal taxation. In virtually erased small business owners and led to that professional people stopped working. If the Republicans don't stop catering to the fundamentalist and religious social conservatives the Republican party is going to be out of power for over 3 elections cycles.
The Republican Party has to become the Modern Republicans whose new creed should be:
Get the government out of my wallet and my bedroom
A Swedish leading Conservative thinker wrote this recently about Sweden and if you don't wise up this might happen to the US.
We need to leave the parasitic society
To get it for free is good, it is said a half jokingly. There are no free lunches, said Milton Friedman. Both statements are true. We appreciate getting things as cheaply as possible, and there is no cheaper than something completely free. The problem is that everything has a cost. If you do not pay yourself somebody else has to pay for it.
Politicians like to promise benefits for free, from dental care to unemployment checks. But someone has to create the resources that politicians so generously give away. Extensive taxes are levied on those who generate the resources to pay for "free" benefits for others. This has far-reaching consequences on what is seen as profitable in a society, which methods enable you to improve your situation.
It simply becomes not viable to work or run a business as means of improving your situation. Rather society rewards those who have a strong voice and therefore can receive benefits through the State through politicians. In economic research, this is often called "the rent-seeking society" - an more appropriate expression would be a "parasitic society."
Where subsidies to agriculture exist, farmers will strive subsidies rather than to compete for consumers. The same applies to companies. Or employees. The number of long term disability retirees grew strongly in Sweden for a long time, until their numbers were larger than the ones employed. Many of them would, if given the chance, without a doubt be able to do other work instead.
The parasitic society rewards unproductive behavior. Therefore, we all lose. In addition it affects how we act politically. The more that has been allowed to live off others' work, the more will vote to keep it that way. And there is nothing wrong with those persons, it is completely rational. This was used shamelessly but thankfully also futilely by the Swedish Social Democrat party [functional socialists] in the 2006 Swedish elections. In creating the welfare state there were very good intentions behind all of this. Today however we know that it instead of creating a healthy and hard working society it created a parasitic society. Everybody that is dependent on entitlements and benefits has come to be in opposition to reform and changes that would benefit every citizen. To change and reform the entitlement system and social security benefits has become the most important political agenda of modern times.
Wednesday, November 5, 2008
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