Thought you might need something to chew on before the fiscal cliff deliberations are being concluded. Your nails will thank me later.
I had the following epiphany when researching Sweden for another project I needed to do. Here’s the thing: Sweden has a balanced government budget. It does have a higher level of spending than the US, as the government makes up roughly 53% of the economy. But as a percentage of GDP, the US government makes up 39%.
Assume that the Americans are perfectly happy with the size of their economy as it is right now. To reach that and balance their budget, they need 75% of… Sweden’s tax rates. But Obama is in office, so expect this to creep higher as you go through the next for years. That means that the US tax burden needs to increase by 50% to balance the budget, which has been known for quite some time.
Still, the way no one phrases it is: they’d have to be more Swedish than American to pull it off! Ain’t that something that will put quite a lot of sandwich in the wrong pipe?