Lessons from Sweden's Capitalist Makeover

WSJ:

• By 1990, center-left raised taxes/spending to 70% of GDP

THEN:

• cuts to unemployment, housing subsidies, pensions
• privatization of public services
• cuts to taxes
• Limit govt. debt to 36% of GDP (vs 129% U.S.)
• govt. spending drops to 24% of GDP (vs. 30% for France, Italy)
• Businesses invent new technologies.
• GDP, house prices, and inequality soar

LESSONS:  

• Incentives drive innovation and inequality
• Innovation drives 2% growth: income doubles in 36 years

HT:  Justin