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Stossel: Sweden is Not a Socialist Success - YouTube
Channel: ReasonTV
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Today, many Americans don't like capitalism.
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Socialism would be better, they say.
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Not repressive Russian or Venezuelan socialism,
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but democratic socialism
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like what's practiced in Scandinavia.
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I think we should look to countries
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like Denmark,
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like Sweden.
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Say why, do you want to be like Sweden?
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Kinda.
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Sounds pretty good.
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People interviewed in this
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just released PBS documentary say
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America should be more like Sweden.
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It seems like it's like a place that
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like no problems or something.
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It is a socialist economy.
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Volvos and uh,
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socialized medicine.
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Volvo
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is now a Chinese company.
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Welcome to Stockholm, Sweden.
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My name is Johan Norberg
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and this is where I was born and raised.
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Johan Norberg made this documentary
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because he wanted to set the record straight.
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Sweden is not socialist
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because the government
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doesn't own the means of production.
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To see that you have to go to
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Venezuela or to Cuba or North Korea.
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But we did have a period in the 1970s and
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1980s when we had something
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that resembled socialism.
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A big government
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that taxed and spend heavily
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and that's the period in Swedish history
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when our economy was going south.
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So much so that even socialists complained about the
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high taxes.
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Astrid Lindgren,
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who wrote the very popular children's books
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Pippi Longstocking for instance,
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she was a social democrat but she had made a lot
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of money from her books.
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She found that she paid 102% in taxes.
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She wrote this angry essay
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about a witch who was quite mean and vicious,
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but not at all as vicious as the Swedish tax authorities.
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And yet even though taxes were high,
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they did not bring in enough money
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to fund Sweden's welfare state.
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There were waiting lines to get health care,
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people couldn't get the pension
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that they thought that they depended on for the future.
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At that point
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the Swedish population just said,
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enough we can't do this.
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Sweden then reduced
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government's role.
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They cut public spending,
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privatized the national rail network,
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abolished certain government monopolies,
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eliminated inheritance taxes,
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and sold state-owned businesses
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like the maker of Absolut Vodka.
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Lower taxes reformed the pension system
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so that it wasn't unsustainable.
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The results from the
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spending cuts and privatization?
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This impoverished peasant nation
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developed into one of the world's richest countries.
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All I hear is that Sweden is this socialist paradise.
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We do have a bigger
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welfare state than the U.S.,
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higher taxes than the U.S.
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But in other areas,
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when it comes to free markets,
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when it comes to competition,
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when it comes to free trade,
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Sweden is actually more free market.
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That free market
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pays for Sweden's big welfare programs.
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Today our taxes pay for pensions.
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You call it Social Security.
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For 18 month paid parental leave,
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government paid childcare,
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for working families,
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but
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having the government manage all of these things
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didn't work well
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so we had to manage it in another way.
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They privatized.
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We realized in Sweden that
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with these government monopolies,
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we don't get the innovation that we get
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when we have competition
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and this is particularly true for the school system.
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Sweden switched to a school voucher system
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that lets parents pick their kids' school,
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and forces schools to compete.
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And one of the results that we've seen is
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not just that the private schools
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are better than the public ones,
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but even the
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public schools in the vicinity of private schools,
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they often improve
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because they have to.
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Sweden's version of Social Security was going broke,
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so Sweden privatized that, too.
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Privatize the pension system?
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That terrifies people.
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And obviously that scares people,
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but when they realize that the alternative
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was that the whole pension system would collapse,
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they thought that this is much
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better than nothing.
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Now the bulk of pensions
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is really
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contribution defined.
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So if things are going well for Sweden
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pensions are increasing,
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but if things are going less well,
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pensions are automatically lowered,
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which basically takes away from politicians
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the ability to buy votes
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by just promising higher pensions
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and letting future generations pay.
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And when it comes to taxes,
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what Sweden does may surprise you.
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The low income earners in Sweden
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pay a lot more than
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low income earners
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in America.
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So despite the fact that Sweden looks
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like sort of a socialist country
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which taxes rich exorbitantly high,
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the truth is the opposite.
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People who earn below average income
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pay up to 60% in taxes.
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This is the dirty little secret
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about the Swedish tax system.
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We don't take from the rich
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and give to the poor.
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We squeeze the poor
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because they are loyal taxpayers.
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Not taking more from the rich,
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school choice,
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privatization,
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Sweden is anything but socialist.
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You can't turn your backs to the well,
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to the creation of wealth.
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You can watch the full documentary
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Sweden: Lessons for America?
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at free to choose.TV.
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