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Bernie and Hillary Beware: Something Is Rotting in Denmark (Forbes.com) November 1, 2015

Posted by daviddavenport in Op/Eds, Politics.

While Democratic presidential candidate Bernie Sanders holds up Denmark as a model for the U.S. to emulate, it looks like Hamlet  was right: something is rotting in the state of Denmark. Thousands have been in the streets protesting 2% per year budget cuts in education, while a commission says they need to reduce jobless benefits, all this following moves to means test recipients of their welfare largesse.

I could go on. Denmark’s budget deficit is soaring, now expected to be double earlier projections, and its levels of private debt are the highest in the world. With wealthier investors enjoying the growth of some businesses and stocks, income inequality is now on the rise. Want to own a car in Denmark? Taxes on a car purchase are 180% and gasoline is around $6 per gallon. Electricity rates are 3-4 times the average in the United States.

Yet progressives continue their long love affair with Denmark. In the Democratic presidential debate, Bernie Sanders offered that we “should look to countries like Denmark…and learn what they have accomplished for their working people.” Hillary Clinton was quick to pile on, saying she loved Denmark, and that we need to “rein in the excesses of capitalism.” Scholar Francis Fukuyama has long described his goal for stable, prosperous democracies as “getting to Denmark.

The Denmark bandwagon was rolling so fast through the Democratic Party that Danish Prime Minister, Lars Lokke Rasmussen, felt the need to clarify the nature of its utopian system. We are not a planned socialist economy, he said, we are a market economy with “an expanded welfare state.” Of course it is the latter, an expanded welfare state, that progressives and liberals long for, providing free health care, education, long-term jobless benefits, and the like. Now that Obamacare has secured universal healthcare, it’s time to offer a free college education, says Senator Sanders. If progressives have their way, the welfare state behemoth in the U.S. will roll on.

But now there’s trouble in utopia. Denmark can no longer afford a full-on welfare state, even with a 46.8% overall tax rate, nearly double the U.S., and a top income tax rate in the 60% range. Sanders, Clinton and other liberals may shudder to learn that even tax reductions are now part of Denmark’s revised economic planning. When you have a negative .5% economic growth rate, Rasmussen’s “expanded welfare state” apparently does not work.

Of course favorable comparisons between the U.S. and Denmark have never really made sense. With a relatively homogenous population somewhere between the states of Colorado and Wisconsin in size, Denmark’s welfare state was never designed to scale across a diverse nation of 300 million people. And at least historically, the U.S. has been an “equality of opportunity” land, not one seeking to guarantee “equality of outcomes.” As Danish musician Agnes Obel wisely put it: “I love Denmark. But…it is easy to let the state look after everything for you.”

If it was ever right for the U.S. to aspire to be like Denmark, this is obviously not the right time. Denmark has run the economic experiment of progressive policies like those of Bernie Sanders (and to a lesser degree, Barack Obama and Hillary Clinton) for us and the verdict is coming in: they don’t work. You can’t suspend the laws of economics. You can’t expand a welfare safety net to cover an entire society. In a free society of 300 million people, getting to Denmark, other than for a pleasant visit to see Tivoli Gardens and enjoy some tasty pastry, makes no sense.

To read the column at Forbes.com:


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