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What Democratic Socialism Does to Economic Prosperity

What is democratic socialism?

Democratic socialism means different things to different people. To many, it means supporting larger social spending within a market-based economy. To others, it is a political philosophy that advocates political democracy alongside a socially owned economy. 

The label of “democratic socialism” has been used to describe the economies of Nordic countries like Denmark and Sweden, as well as those Venezuela and Cuba, leading to further confusion about the term.

Which kind of socialistic policies did Sweden apply and what were the consequences?

Sweden turned to socialism in the 1970s, raising taxes, spending, and regulation to a larger degree than most other Western European countries. As a result, its economic growth slowed to almost half as fast as the rest of Europe or the United States for two decades.  Moreover, by the early 1990s, its government was spending over seventy percent of everything earned in the economy.

Before its socialist experiment, Sweden had a smaller government sector than the U.S. By the early 1990s, government spending and transfer payments ballooned to 70% of gross domestic product, and debt had increased to 80% of GDP. Between 1966 and 1974, Sweden lost some 400,000 private jobs—proportionate to 16.7 million in the United States.

What are social safety nets?

Social safety nets are a collection of services, such as welfare programs, provided by the state or other institutions to protect low-income individuals from poverty and hardship. The programs are meant to be a safety net to catch those who have fallen on hard times. 

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