Do Social Democracies Work?
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Do Social Democracies Work? 1 Do Social Democracies Work? 1) Definitions and Scope 2) Measuring success in Social Democracies 3) Keys to public support of Social Democracies 4) Evaluating readiness for change in the U. S. 5) Conclusion: Is significantly expanding government social spending in the U.S. a realistic proposition? 6) Open Discussion Do Social Democracies Work by Kenneth Ing 2020 2 Introduction : Definitions and Scope What are Social Democracies? Which countries are Social Democracies? The term “Social Democracy” describes countries Sweden that have accepted higher levels of taxation to Finland fund more generous “safety nets” and human development programs, while still embracing Norway capitalism as the economic foundation. Denmark Do Social Democracies Work by Kenneth Ing 2020 3 Show Me The Money : Social Spending 2018 Do Social Democracies Work by Kenneth Ing 2020 4 Mythbusting : Defense Spending A common misconception is that the U.S. spends less on social programs because it shoulders a substantial expense for defense and foreign aid. While it is true that the U.S. spends more on defense than other countries, that still only adds up to 3-4% of GDP. When all government spending is added up, including defense, the U.S. is even further down the list of big spenders – 3rd from the bottom in the OECD. Do Social Democracies Work by Kenneth Ing 2020 5 Measurements of Success in First World Countries Economic Prosperity Citizen Happiness 1) World Happiness Index 1) GDP Growth Rates 2) Crime Rates 2) Unemployment Rates 3) Drug Use Dependency Govt Fiscal Health Poverty & Inequality Nations set 1) Income < ½ median 1) Total Gross Govt Debt priorities based on 2) % of poverty avoided due 2) Current Budget Deficit cultural values to government assistance 3) Income Inequality Index Citizen Health 1) Life Expectancy at birth 2) Commonwealth Fund United States gives high priority to ranking of health care Social Democracies give high priority to economic prosperity citizen well being Do Social Democracies Work by Kenneth Ing 2020 6 Measuring Success : Social Democracies DO Work! Economic Prosperity Happiness Poverty/Equality Fiscal Sustainability Health Grade Economy % Live Below Percent Subjective Overall Unemploy World Crime Rank Drug Use Income Total Life Growth Poverty Line Poverty Was 2018 Budget Rank of Rank Country Rate Happiness (Interperson Dependence Inequality Govt Debt Expectancy Per Capita Violence After Reduced By Deficit Health Care In (1996-2018) Index Prevalence Index % of GDP At Birth (1996-2016) Frequency) Assistance Assistance Systems Group Iceland 2.4% 4.2% 7.49 2 0.66% 27 6.4 66% 38% 1.1% 82.20 1 Norway 1.2% 3.6% 7.55 6 0.75% 26 7.8 67% 36% 7.2% 4 82.51 2 Netherlands 1.5% 4.8% 7.49 5 0.82% 28 7.2 70% 52% 1.5% 3 81.56 3 Switzerland 1.0% 7.48 3 0.85% 32 9.3 53% 28% 1.3% 6 83.60 4 Green Denmark 1.0% 5.7% 7.60 4 0.76% 29 6.1 72% 34% 0.5% 81.00 5 is Sweden 2.0% 7.0% 7.34 17 0.61% 27 8.4 68% 39% 0.9% 6 82.31 6 Good Finland 1.8% 8.6% 7.77 15 0.77% 27 8.0 73% 59% -0.7% 81.43 7 Austria 1.3% 4.8% 7.25 9 0.79% 30 7.9 73% 74% 0.1% 81.64 8 Germany 1.3% 7.4% 6.99 1 0.71% 30 8.9 73% 61% 1.7% 8 80.99 9 New Zealand 1.5% 5.4% 7.31 22 1.64% 11.0 51% 31% 0.4% 4 81.66 10 Gold Ireland 4.3% 8.1% 7.02 8 0.91% 33 65% 0.0% 81.96 11 is Belgium 1.2% 7.7% 6.92 12 0.69% 28 9.4 70% 102% -0.7% 81.44 12 Just OK Australia 1.8% 5.9% 7.23 20 1.96% 35 14.6 46% 41% -1.5% 2 82.50 13 United Kingdom 1.5% 5.8% 7.05 16 1.43% 33 11.0 65% 85% -1.5% 1 81.16 14 France 1.0% 8.9% 6.59 13 0.95% 33 7.2 78% 98% -2.5% 10 82.52 15 Japan 0.8% 4.2% 5.89 7 0.70% 32 15.7 45% 253% -3.2% 84.10 16 Pink Canada 1.4% 7.3% 7.28 19 1.92% 34 12.0 51% 91% -0.3% 9 82.47 17 is Spain 1.4% 16.0% 6.35 14 1.14% 36 14.0 49% 97% -2.5% 83.33 18 Bad Greece 0.7% 15.2% 5.29 10 0.45% 37 10.8 65% 181% 1.1% 81.39 19 Portugal 1.0% 8.8% 5.69 11 0.59% 36 14.0 49% 122% -0.5% 81.12 20 Italy 0.2% 9.6% 6.22 18 0.91% 35 11.4 66% 132% -2.1% 83.24 21 United States 1.5% 5.8% 6.89 23 3.02% 41 17.3 36% 106% -3.9% 11 78.54 22 Venezuela 1.0% 4.71 21 0.66% 47 47% -3.6% 74.70 23 Do Social Democracies Work by Kenneth Ing 2020 7 Keys to Public Support of Social Democracies Trust Fellow Citizens Trust Government 1) Size Matters 1) Size Matters 2) Values Alignment 2) Perceptions of waste 3) National trauma binds 3) Perceptions of corruption 4) Fixation on work incentives 4) Fairness of taxes 5) Fixation on Free Riders 5) Fair distribution of benefits Balance the Books Effective Government Mis-alignment 1) Taxes rise in proportion to generosity of benefits makes citizens 1) Majority Rule 2) Having a national currency resistant to 2) Citizen Input helps adapt to new generous benefits 3) Centralized Labor Representation economic circumstances 4) Accountability Incentives against abuse Economic Security 1) Institutions (Rule of Law, etc) 1) Incentives to return to work 2) Educated work force 2) Co-pays (skin in the game) 3) Social Mobility 3) Mandatory contributions 4) Safety Net 5) Competitive Economy Large countries struggle with trust of govt and each other Scandinavian countries tend to have good social cohesion Do Social Democracies Work by Kenneth Ing 2020 8 Measuring Keys To Support : Social Democracies Rate “Good” On Most Key Metrics Success Balance the Books Trust Economic Security Avoid Abuse Overall Govt Total Tax Revenue Opinion Poll: Opinion Poll: Opinion Poll: Opinion Poll: Social Unemploy Out-Of-Pocket Unemploy Unemploy Rank Of % Who Say % Who Say Taxes Fair For Government Percent of Benefit Benefit Country Social Spend Govt Debt Include FICA Mobility Rate Success People Can They Trust Middle Class? Is Wasteful Health Care Amount Duration % of GDP % of GDP % of GDP Index (Current) Metrics Be Trusted Government (Rank # Yes) (1=Bad 7=OK) Costs (% of Wages) (Months) Iceland 1 16 38% 38 36 11 4.2 82.7 4.7% 29% 36 Norway 2 25 36% 38 69 57 3 4.5 83.6 3.4% 14% 62% 24 Netherlands 3 17 52% 39 55 57 4.6 82.4 3.4% 15% 70% 28 Switzerland 4 16 28% 28 37 40 9 4.9 82.1 2.1% 19% 70% 18 Green Denmark 5 28 34% 46 47 5 4.3 85.2 3.7% 12% 90% 24 is Sweden 6 26 39% 44 63 49 2 4.8 83.5 6.8% 16% 80% 14 Good Finland 7 29 59% 43 54 49 4 4.9 83.6 6.2% 65% 19 Austria 8 27 74% 42 43 3.9 80.1 6.5% 42% 9 Germany 9 25 61% 38 35 41 8 4.1 74.3 3.1% 13% 60% 3 New Zealand 10 19 31% 32 52 66 6 4.5 78.8 4.2% 13% 21% Gold Ireland 11 14 65% 23 57 3.5 75.0 4.5% 21% 9 is Belgium 12 29 102% 45 42 14 3.5 80.1 5.5% 65% 48 Just OK Australia 13 18 41% 28 48 45 7 4.0 75.1 5.2% 18% 17% United Kingdom 14 21 85% 33 30 55 1 3.6 74.4 3.8% 15% 10% 6 France 15 31 98% 46 19 28 15 3.4 76.7 8.7% 9% 70% 24 Japan 16 22 253% 31 39 36 12 3.3 76.1 2.4% 13% 80% 9 Pink Canada 17 17 91% 32 39 62 4.1 76.1 5.5% 14% 55% 9 is Spain 18 24 97% 34 26 30 13 3.0 70.0 14.0% 55% 24 Bad Greece 19 23 181% 39 13 2.4 59.8 17.6% 21% 12 Portugal 20 23 122% 35 35 2.8 72.0 6.8% 60% 24 Italy 21 28 132% 42 28 24 2.2 67.4 9.9% 22% 75% 24 United States 22 19 106% 27 37 30 10 3.2 70.4 3.7% 11% 50% 6 Venezuela 23 47% 15 3 1.5 7.3% Do Social Democracies Work by Kenneth Ing 2020 9 Readiness for Major Change in the U.S. Do Social Democracies Work by Kenneth Ing 2020 10 Conclusion : Is Significantly Expanding Social Programs in the U.S. Realistic? The Case FOR The Case AGAINST • Yes We Can • Culturally The U.S. can, and arguable should, do better. We We are not ready. The U.S. culture is very individualistic. Social cohesion is weak. Many feel rank at the bottom on most metrics reflecting government is wasteful.