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Tuesday, May 5, 2020

Congress Just Made America into Sweden

Yes, I am disappointed with libertarians who spent more time awing over the absence of a lockdown in Sweden than they did looking for the spending devil in the details of the coronavirus relief bills. I hope they can afford the tax hikes.

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I know a lot of libertarians who will sing in joy and praise over the headline of this blog article. They have spent the past few weeks running around with their hands flailing in the air, singing hymns of praise to Sweden for not imposing a coronavirus lockdown. 

Many of them have also praised Sweden for its school choice program and its vast system of private health care. None of that is true, of course: their school "choice" program is nothing more than our charter-school system, and they don't have a single private hospital. Government runs the Swedish health care system with an iron fist, stamping out private clinics wherever they can.

But while America's libertarians are all teary-eyed about Sweden, having enormous problems distinguishing their Swedophilia from that of Bernie Sanders, Congress is actually making the libertarians very happy. They have decided to Make America Sweden Again:
An employer shall provide paid leave for each day of leave ... that an employee takes after taking [unpaid] leave ... for ten days. ... paid leave under subparagraph (A) for an employee shall be calculated on ... an amount that is not less than two-thirds of an employee's regular rate of pay ... and the number of hours the employee would otherwise be normally scheduled ot work
So there we are. We now have a federal paid-leave program in America. Taxpayers are now obligated to fund a person's sick leave.

This was the big step: creating the program itself. Now that it is in place, it will go through the same metamorphosis that every entitlement program does: it will grow.

And grow.

And grow.

If America's libertarians weren't so busy praising the lack of a coronavirus lockdown in Sweden, they might have actually noticed that the country they adore and admire is actually an economically oppressive welfare state. 

I have not heard a single libertarian voice a single word of caution about this. Well, one, actually: Rachel Greszler over at the Heritage Foundation. She has done great work on the paid-leave issue. But other than that, the libertarian flank of the political spectrum is echoing empty with silence on this the most tangible example of welfare-state growth in our country today.

Since he was elected, President Trump has taken a couple of small steps in this direction. He included a proposal for paid leave in his first budget; he endorsed paid leave for federal employees in his latest State of the Union speech; and with his signature on HR 6201 earlier this year, he thus created a paid-leave program for the general public.

Technically, this program is only a sick-leave program, and - again - it is only supposed to provide two weeks' worth of benefits. But can anyone in the room name one entitlement program that has ever been created and then remained unchanged for the entirety of its life span? Anyone? No?

I can't find one either. The reason is simple: under a socialist welfare state, entitlement programs are not supposed to stay unchanged. They are supposed to grow. They are supposed to do their work as vehicles of economic redistribution. That is precisely what the American welfare state is set up to do.

Therefore, every time Congress adds a new program, it creates another engine of future government growth. A paid-leave program funded by the federal government will eventually grow to spend hundreds of billions of dollars each year. It will provide benefits not just for sick leave, as is the case for now, but for parents to be home with newborns, or with a sick child, or for other episodes requiring someone to be away from work. 

Paid leave will be a highly favored vehicle for politicians who wish to win more votes. Add another benefit, expand coverage for another few weeks, raise the income reimbursement rate...

There are fewer and fewer differences between America and Sweden. While my libertarian friends cheer this, I happen to be very worried about what the ramifications will be from the taxes needed to pay for this massive welfare state. Sweden taxes away about 47 percent of the economy, relying on a 30-60-percent income tax, a value added tax up to 25 percent (that applies to everything including tap water), a payroll tax twice as high as ours, and a few other things you can read more about here

If we go all-out Sweden here, as we are now well underway with, you can expect your taxes to go up by anywhere between ten and fifteen percentage points. The biggest tax hikes will be for lower-income families, whose tax burden in Sweden is outright confiscatory compared to here. 

Congress has more up its sleeve from its Sweden deck. Expect another push to take us closer to single-payer health care. I know Republicans will resist this, but the Democrats are on fire. They won't take no for an answer (unless, of course, they lose in November). Sadly, a lot of the conservative and libertarian skills to resist the welfare state have been lost over the years:


Meanwhile, the left has sharpened its tools and pushed America closer and closer to their dreamland.

It remains to be seen who raises the Swedish victory flag first: libertarians who think Sweden is a libertarian heaven, or socialists who think Sweden is a socialist dreamland. 

While you wait for the outcome, prepare yourself for a long, rough ride into industrial poverty and permanent economic stagnation. 

2 comments:

  1. Sven, your libertarian friends must be left libertarians because as a libertarian myself I haven't heard any true libertarians being so deluded as to praise the Swedish welfare-state as anything remotely libertarian.

    ReplyDelete
    Replies
    1. Unfortunately, it has been an ongoing trend. Leading the Swedophilia pack has been Cato Institute Senior Fellow Johan Norberg and Duke University professor Michael Munger, both often recognized as "traditional" libertarians:

      https://polecon.thewyomingprosperityproject.com/2019/03/socialism-in-sweden-part-1.html

      More recently, during the coronavirus crisis, there has been a libertarian chorus praising the Swedish government's decision not to lock down the economy. That is a valid point per se, but the energy that those libertarians spent on praising the absence of a lockdown ignored two important facts: 1) the Swedish lockdown led to a higher death rate because they have an ill-functioning single-payer health care system; and 2) while they were looking at Sweden, as I point out in this article Congress used the crisis to radically expand government.

      In this context, was it worth all this hype about the lockdown? Of course not. This is a matter of priorities.

      Glad to hear you are a traditional libertarian. We need all hands on deck, now more than ever.

      Delete

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