Monday, September 18, 2006

Swedish socialists lose power.

Swedish voters have thrown out the ruling Socialist party. Fredrik Reinfeld to the Moderate Party declared victory and the Prime Minister, Goran Persson conceded defeat. But Persson said the socialists would fight any reforms the new government tries to institute. The BBC reported a victory margin of 1 percent but Swedish televison shows the opposition leading by 4 percent.

Sweden’s has had some real problems over the years. First, in relationship to the rest of the member nations of the OECD they have been declining in per capita income. When Sweden instituted it’s welfare system it was one of Europe’s wealthiest nations. Since doing so it has been declining steadily. Contrary to the common claims on the Left Sweden did not become wealthy after adopting the welfare state. It was already wealthy when it did so. In fact Sweden, before the welfarism, had one of the lowest tax rates in the developed world.

The major problem has been unemployment. The government has tried to claim unemployment was around 6% but in fact it is in double digits. One prominent studies estimates that Sweden’s real unemployment is somewhere around 15% to 17%. Many “unemployed” get reclassified into other welfare categories to hide the real rate of unemployment. It is a trick used by many Left governments around the world. People who have been long-term unemployed often get moved to a “sickness benefit” instead even though they are able to work.

Currently 30% of employed Swedes are employed by the government. And it is said that no new jobs have been produced in the private sector for decades.

Persson has also said he will step as party leader which may allow new blood to reform the party in a more sensible direction.