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Pastimes : Discussion Thread -- Ignore unavailable to you. Want to Upgrade?

To: RMF who wrote (3707)	4/8/2010 11:31:46 AM
From: TimF	1 Recommendation Read Replies (1) \| Respond to of 3816

He's not very concise. The point I was looking for your opinion about was --- Now let’s assume that in Northwestern Europe (especially the Nordic countries (including Holland), but to a lesser extent the other countries north of the Alps and west of Poland) the center of the political spectrum is “liberal” as the term is defined in America. So they are successful in erecting a large welfare state. Once they achieve this success, however, they start running into problems. The heavy tax and subsidy burden starts slowing growth in the 1970s and 1980s. Unemployment rises sharply. In response they frantically cut away at all sorts of non-essential statist interventions, anti-market policies that don’t seem to have much egalitarian benefit. In particular, they do the following: 1. Adopt tax systems biased toward consumption, not capital. I believe that many of the countries in that region have no capital gains taxes. Sweden has no inheritance tax. All have lower corporate income tax rates than the U.S., often by a wide margin. And their corporate rates are falling rapidly, whereas ours is stable. 2. Institute a policy of openness toward trade and investment. Many of those countries are more open than the U.S. 3. Most importantly, privatize everything in sight. Not just Conrail, like we did. But also passenger rail, postal services, highways, water systems, air traffic control, airports. In other words exactly the sort of public services that if I told my liberal friends should be privatized, they would call me a reactionary. Indeed our Hollywood movies actually demonize those who favor such policies. The new Bond movie replaces SPECTRE with an evil businessman who wants to privatize water distribution in Bolivia. (More “political art.”) 4. Improve education through school vouchers programs, as Holland has done, and Sweden has begun to do. 5. Encourage saving (to offset the disincentives to save in a welfare state) through fully-funded private social security accounts. --- or to put it even shorter the idea that a European style social-democrat system doesn't have to be harmful to the economy if the governments shrink in areas that don't serve that purpose. Redistribute money to the poor, provide some social services to the middle class, but to make up for that cost, pear other things to the bone, privatize all over the place and focus hard on efficiency. Also shift taxation towards consumption.