the 2nd budgetproposition

The 2nd budget proposition produced by the centre-right alliance is a responsible one, making total surplus bigger than the official surplus goal of 2 percent of BNP. I had the opportunity of seeing Anders Borg, who has history at the SSE, summarize the budget during two interesting hours at the SSE. He obviously emphasized on how this budget is supposed to increase employment rates even more, even though they have already risen significantly since the centre-right government took over. The higher employment rate is obviously not only a fact due to the new governments work but even critics argue that the reforms that have been made have taken on the unemployment in an efficient way.

This is not a miracle but simple economical science. Sweden has a high share of structural unemployment where reallocation of workers is a big problem, with hundreds of thousands of workers being able to work in a country that is experiencing prosperous times. To lower the social security rates and force people to start searching for jobs is brushing some of this structural unemployment aside. Therefore the argument "that reforms of this kind don’t increase the amount of jobs, instead they just make life hard for unemployed people", is easily brushed aside. Obviously some people get squeezed in the new system, however the reform is supposed to make it harder for people who don’t have a job but are able to work physically etc. to go on with exploiting the generous social care system. Nobody ever said that sick people should be forced to work, that is just an empty argument made by the leftwing side.

Other interesting things that were mentioned was obviously that the tax of owning property is being replaced with a fixed fee and some raises in taxes on fuel and alcohol. This is interesting because a raise in the tax on fuel is politically very sensitive but actually a good way (one of the most effective) of increasing tax revenues. About 30öre on each litre is translated into billions. Because I believe in Mr Borg’s way of doing things I can accept this. He is financing tax cuts in other areas and obviously a tax on alcohol is preferable if compared to taxes on work.
When it comes to the elimination of property taxes I can’t say anything else than finally. It’s a tax that is hitting certain people extremely hard and it is a myth that only rich people suffer from it. The tax itself is not that bad from an economic view since it doesn’t affect the economy as a whole, however the unfairness is so evident that not even I, as an economist more than a politician, can understand and support its purpose.

I’ll end this post with a quote in Swedish. This is the response Anders Borg got from his Finnish counterpart when he was asking for advice on how to solve the serious problem in Sweden concerning the exploitation of the social care system.

"Sjukskrivningar... I Finland Anders sjukskriver vi folk som är sjuka."
Sometimes it can be so simple...
/Rob

ps. Is this a joke?