Okay, so where did we leave off from yesterday’s “Will America Elect a Socialist Part 1”…
Oh, yeah…”But, but, but…DENMARK!”
Yes, Denmark, the happiest place on Earth.
Or so we’re told. Countries like Denmark are often used as examples of “democratic socialism” working very well.
I will concede that when looking at Denmark’s current situation, they do seem to be doing well. They enjoy a high standard of living, protected property rights and enjoy an overall happy existence. For the most part, they seem to be content with their situation with universal health care provided and many nice benefits (guaranteed paid 5 week vacations, parental leave, pension plan, etc.).
Some questions to be answered are:
1) At what cost?
2) Can it last? and
3) Could it possibly work the same for the United States?
It costs a lot to provide the services and benefits that the Danes enjoy so much. That means very high taxes…for everyone. Like over half of your income in the form of a “gross tax”, an income tax, and then a health care tax.
In addition to those taxes, they have a 24% VAT tax on all purchases. And if that’s not enough, there are some wild “social engineering” taxes such as the 180% tax when you buy a car (to discourage buying cars, of course). Yes, 180%! A $20,000 car would cost $56,000 after the taxes are added, because, you see, the “experts” have decided that your life would be better without a car.
There are all sorts of other little taxes and fees here and there, but those are the big ones. All of these tax dollars go to the centralized government which determines how it will be spent for you for the benefits you receive. So, if you’re happy with someone else making all of those decisions for you, great, no problem.
But, can this last? Is it sustainable?
Not if all examples in history mean anything. And there are definitely some signs of the system breaking down already.
First, these types of economic systems discourage innovation, investment, and working harder than you have to. Therefore, you can expect that economic growth would be depressed. Sure enough, if you look at the GDP growth rate for Denmark over the past 25 years, the trend line shows a steady decrease from about an average annual growth rate of an anemic 0.5% in 1991 steadily decreasing to a near 0% growth rate today. If the trend line continues (and there’s no reason it wouldn’t), then they’ll be now heading into negative growth territory.
This means that they will not be able to afford all of their social benefits without either raising more taxes (making matters worse) or depleting the quality or quantity of benefits. Probably both.
Also, there are signs that people are starting to take advantage of the system and once that happens, resentments will seep in and a downward spiral will quickly ensue.
Lastly, their liberal immigration policies have created a situation where new immigrants coming in and claiming these benefits is beginning to take its toll, especially with the increased influx of refugees due to the world’s problems. It’s beginning to bring their finances to a breaking point.
As with every other time it has been tried, this “democratic” socialism will also eventually fail.
The last question concerning Denmark is that even if their system works for them (which it won’t, because the laws of economics and human nature will not allow it in the long run), can it work for us?
It’s highly unlikely.
There are very BIG differences between Denmark and the United States. First, Denmark has a population of about 5.6 million (roughly the size of Wisconsin). They are a largely homogenous people, having the same values, interests, culture, history, and work ethics. This type of situation will go a long way in enabling a system where everyone is counting on each other to pull their own weight, at least seemingly so for a while.
In the United States, on the other hand, where we have a population of over 320 million, spread out over a vast area, and an enormous diversity of values, interests, culture, history, and work ethics, and where there already exists great divisions and resentments concerning redistribution of property, as well as a strong contempt for and mistrust of the mechanisms of government, implementing further socialistic policies will immediately cause additional animosities and conflict. Combine that with our inability (or unwillingness) to control our borders so that more and more people will pour into the country as we increase benefits, and whatever we have left of tranquility in the nation will quickly dissolve.
Ahhh, tranquility…remember tranquility? Insuring it is one of the main, stated purposes of creating the Constitution…it says so right in the Preamble.
Ok, back to Bernie…I get it…I understand the appeal. People are feeling that the system is rigged against them and the majority of us are getting the short end of the stick while the rich and powerful take advantage of and manipulate our economy and our government. There is tremendous income inequality, the wealth is being accumulated by the very few while the masses struggle paycheck to paycheck, trying to make ends meet…if they are lucky to get a paycheck because many of the good jobs have been shipped overseas. The big special interests consistently work to the disadvantage of the little guy.
All of that is absolutely true. Bernie has definitely identified the symptoms accurately and the people are clamoring for a remedy. Bernie has come along, stands with the people and explains how he understands these problems and is offering a solution that sounds wonderful. I can sincerely understand how people can get caught up in it and envision this “better way”. But I also understand that it requires a bit more critical thinking.
Yes, Bernie has correctly identified many of the symptoms of the problems we are facing.
Bernie looks at these symptoms and declares, “Yes! I have seen these ailments before! We have a disease called capitalism! Capitalism is a bad thing that needs to be eradicated because all it does is leads to inequality!” (OK, that’s not an exact quote, but is the gist of what he is telling us).
However, it turns out, Bernie is an economic quack and has misdiagnosed the causes of these symptoms.
How did the Untied States relatively quickly grow and become the economic superpower of the world? Liberty and capitalism.
How is it that the poor in America enjoy a higher standard of living than the poor anywhere else in the world? Liberty and capitalism.
Why is it that people from all over the world are so eager to move to the United States, looking to lead a better life for themselves and their family? Yep, liberty and capitalism.
Okay, so if capitalism is so great, why are we now experiencing these symptoms?
Easy answer…because over the past 100 years or so, we have “progressively” moved more and more to a system of socialism, away from the capitalism that created this great nation. Yes, that’s right, the problems we are facing right now are caused by the level of socialism ALREADY in our system, so Bernie’s solution of MORE socialism is the exact opposite of what is needed.
“Wait…..WHAT??? That’s ludicrous,” you say. “How can you make that claim? We don’t have a socialist system!”
Join me tomorrow in the next edition of “Will America Elect a Socialist” to explore that claim.
Feature Photo By Nigel Swales