Krugman Urges Scandinavia to Protect Welfare U.S. Only Dreams Of

[Purveyor]

By Saleha Mohsin - Jan 8, 2014

Nobel Laureate Paul Krugman questioned efforts to rein in welfare in Scandinavia after Denmark abandoned its universal benefits model and Sweden started prioritizing tax cuts over spending.

“It’s not clear that the crisis required these actions,” Krugman said yesterday in an interview in Oslo. “It’s not clear that anything that’s happened says that tax cuts should be a priority for the Swedes.”

Scandinavia, which investors treated as a haven during Europe’s debt crisis, has kept public debt at less than half the euro-zone average while providing citizens with free healthcare and education. Danes and Swedes pay for the services with the world’s highest tax burdens which, relative to gross domestic product, are almost double the 25 percent in the U.S., according to the Organization for Economic Cooperation and Development.

Yet some Scandinavian services, including jobless benefits, study grants and child support, were curbed during the crisis as governments said tax cuts were a more effective tool for creating jobs than public spending.

“We continually alter priorities and financing to optimize the model,” Danish Finance Minister Bjarne Corydon said Jan. 7 in an interview in Copenhagen.

more...

http://www.bloomberg.com/news/2014-01-08/krugman-urges-scandinavia-to-protect-welfare-u-s-only-dreams-of.html

RELATED: Rich Danes Face Benefit Cuts as Universal Welfare Abandoned

By Peter Levring - Jan 8, 2014

Denmark’s richest citizens are finding themselves cut off from some welfare benefits as Scandinavia’s weakest nation reviews state-paid services once considered a universal right.

“We’ll see a welfare state that is gradually optimized to work under the conditions of globalization and global competition,” Danish Finance Minister Bjarne Corydon said yesterday in an interview in Copenhagen. “We continually alter priorities and financing to optimize the model.”

---CLIP
Paradigm Shift

Since coming into office in 2011, the government has cut state aid for the unemployed and raised the retirement age. College and university students are means tested before gaining access to study grants. As of this year, families earning more than $130,000 a year won’t have the same access to child support as poorer households as the government ensures funds target those who need them most.

The decision marks a departure from the principle of welfare for all, regardless of income level, that had dominated Danish politics before the financial crisis.

“This is a paradigm shift,” Peter Kurrild-Klitgaard, a professor of political science at the University of Copenhagen, said in a phone interview. “Danes probably got used to consuming welfare services more than they strictly needed to.”

MORE...

http://www.bloomberg.com/news/2014-01-07/richest-danes-face-benefit-cuts-as-universal-welfare-abandoned.html

[immoderate]

1. Means testing for some state benefits makes sense to me.

Inasmuch as a system works toward reducing inequality, I'm tentatively for it.


--imm