Wednesday, July 29, 2009

Swedish Finance Minister Warns of Big Gov’t Healthcare

Forbes reports that Sweden's (itself walking billboard for a social welfare state) Finance Minister Anders Borg believes that the 1970s and 1980s were lost decades for Sweden:

Left-leaning politicians pushed government spending, excluding investment outlays, from 22% of gross domestic product in 1970 to 30% in 1980. Real growth fell from an average of 4.4% annually in the 1960s to 2.4% in the 1970s and remained low for the next two decades.

"Like many societies, we went too far in our welfare-state ambitions," say Borg.

These days President Obama is overseeing the largest increase in the U.S. government's share of the economy since it was conducting a world war almost seven decades ago. Economic stimulus, bailouts and expanded health care will all have to be paid for someday with either taxes or inflation. Borg is pushing Sweden in the opposite direction, encouraging the legislature to cut taxes, cap spending and privatize parts of health care.

"If you're working yourselves upwards in taxes and deficits, we're working ourselves downwards," says Borg.

If you think Borg has the right idea, put your money on it. Sell some U.S. stocks and buy some Swedish ones… These are the top holdings of the MSCI Sweden ETF:

(More here)