I explained yesterday that Denmark is not a good role model for American leftists.
Simply stated, Otto Brøns-Petersen’s video shows that the admirable outcomes in that country are the result of laissez-faire markets, and the bad outcomes are the result of the welfare state imposed beginning in the 1960s.
But to make matters clear, here’s a comparison of Denmark and the United States from Economic Freedom of the World:
The bottom line is that if folks on the left want to claim Denmark is socialist, then America also is socialist. Alternatively, if Denmark is an example of Democratic Socialism, then so is the United States.
Needless to say, I won’t hold my breath.
Today, I want to focus on another aspect of Danish public policy that warms my heart. Back in 2015, I applauded the government for imposing some spending restraint, and I expressed hope that plans for future fiscal discipline would be fulfilled.
Well, based on IMF and OECD data, policymakers in Denmark deserve a gold star. They followed my Golden Rule and limited the growth of government spending. As a result, there’s been a meaningful decline in the burden of spending (measured as a share of economic output).
Too bad American politicians weren’t similarly prudent. If federal spending in the U.S. grew at the same rate since 2012, the burden of spending today would be more than $700 billion lower.
And since spending is the problem and red ink is the symptom, it naturally follows that the United States would have a deficit this year of about $370 billion instead of nearly $1.1 trillion.
Daniel J. Mitchell is a top expert on tax reform and supply-side tax policy and is Chairman of the Center for Freedom and Prosperity. Mitchell is a strong advocate of a flat tax and international tax competition.