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Thursday, June 07, 2012 2:50:50 PM
Sweden — Sweden!!! — as Conservative Icon
I learn from Ezra Klein’s interview with Tom Coburn [ http://www.washingtonpost.com/blogs/ezra-klein/post/sen-tom-coburn-part-one-defusing-the-debt-bomb/2012/05/15/gIQAIUteRU_blog.html#pagebreak ] that Sweden, of all places, has become the new right-wing icon. I thought Europe’s woes were all about collapsing welfare states? But anyway, the story now is that Sweden has slashed spending and cut taxes, and is doing great; supply-side economics vindicated!
Ezra points out, rightly, that Sweden has actually benefited a lot from very aggressive monetary policy — one of the original Princeton zero-lower-bound Group of Four, Lars Svensson, is now deputy governor of the Riksbank. (The others were Mike Woodford, yours truly, and a fellow by the name of Ben Bernanke).
But Ezra didn’t challenge Coburn on the claim about spending cuts; why don’t we look at what Sweden has actually done, as opposed to the official right-wing line? Look, in particular, at actual government consumption — purchases of stuff. Here’s Sweden versus the United States, from Eurostat:
Somebody has been practicing harsh spending-side austerity — and it’s not Sweden.
Krugman__May 16, 2012, 10:29 am
http://krugman.blogs.nytimes.com/2012/05/16/sweden-sweden-as-conservative-icon/
I learn from Ezra Klein’s interview with Tom Coburn [ http://www.washingtonpost.com/blogs/ezra-klein/post/sen-tom-coburn-part-one-defusing-the-debt-bomb/2012/05/15/gIQAIUteRU_blog.html#pagebreak ] that Sweden, of all places, has become the new right-wing icon. I thought Europe’s woes were all about collapsing welfare states? But anyway, the story now is that Sweden has slashed spending and cut taxes, and is doing great; supply-side economics vindicated!
Ezra points out, rightly, that Sweden has actually benefited a lot from very aggressive monetary policy — one of the original Princeton zero-lower-bound Group of Four, Lars Svensson, is now deputy governor of the Riksbank. (The others were Mike Woodford, yours truly, and a fellow by the name of Ben Bernanke).
But Ezra didn’t challenge Coburn on the claim about spending cuts; why don’t we look at what Sweden has actually done, as opposed to the official right-wing line? Look, in particular, at actual government consumption — purchases of stuff. Here’s Sweden versus the United States, from Eurostat:
Somebody has been practicing harsh spending-side austerity — and it’s not Sweden.
Krugman__May 16, 2012, 10:29 am
http://krugman.blogs.nytimes.com/2012/05/16/sweden-sweden-as-conservative-icon/
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