For decades, American politicians cited Sweden as proof that...
Students For Liberty@sfliberty
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Jun 12, 2026
~3 min read
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For decades, American politicians cited Sweden as proof that democratic socialism works.
The Wall Street Journal sent a reporter there in 2026 to see for themselves.
The Sweden they found is not the country Bernie Sanders describes on the debate stage. 🧵
The Wall Street Journal sent a reporter there in 2026 to see for themselves.
The Sweden they found is not the country Bernie Sanders describes on the debate stage. 🧵
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The mythical Sweden has high taxes, generous welfare, a big state, and equality enforced by government.
Swedish social spending in 2026 is 23.7% of GDP. That puts Sweden below France, Finland, Germany, Belgium, Italy, Austria, and Denmark. It sits at roughly American levels.
Swedish social spending in 2026 is 23.7% of GDP. That puts Sweden below France, Finland, Germany, Belgium, Italy, Austria, and Denmark. It sits at roughly American levels.
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Sweden still taxes heavily.
Total tax revenue runs around 42% of GDP, well above America's 27%. But the structure changed.
The top income tax rate fell from nearly 90% in 1980 to around 50% today. The inheritance tax was abolished in 2005. The wealth tax followed in 2007. Sweden funds its state through a flat 25% VAT and broad payroll taxes that hit everyone, not through punitive rates on capital. Public debt is 33% of GDP. America's is 122%.
Total tax revenue runs around 42% of GDP, well above America's 27%. But the structure changed.
The top income tax rate fell from nearly 90% in 1980 to around 50% today. The inheritance tax was abolished in 2005. The wealth tax followed in 2007. Sweden funds its state through a flat 25% VAT and broad payroll taxes that hit everyone, not through punitive rates on capital. Public debt is 33% of GDP. America's is 122%.
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One in three upper-secondary schools is run by a private company. Roughly one in ten Swedish teenagers attends a school operated by a company listed on the Stockholm stock exchange. None of those schools can charge tuition. The state pays per pupil and parents choose where the money goes.
Almost half of Sweden's primary care clinics are privately owned and publicly funded.
Almost half of Sweden's primary care clinics are privately owned and publicly funded.
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St. Göran's Hospital in Stockholm is publicly funded and run by a private healthcare company. It costs 15 to 20% less per procedure than equivalent state hospitals and produces better outcomes. It has been running since 1999.
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In the ten years through 2024, Sweden produced more than 500 IPOs. That is more than Germany, France, the Netherlands, and Spain combined, in a country of ten million people.
Sweden has more billionaires per capita than the United States. The IMF forecasts 2% annual growth through 2030, equal to America and double France and Germany.
Sweden has more billionaires per capita than the United States. The IMF forecasts 2% annual growth through 2030, equal to America and double France and Germany.
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Sweden was not always this. Public spending reached 72% of GDP by 1993. The deficit hit 13%. Overnight interest rates briefly touched 500%. Growth stalled for years.
The system American politicians describe today is the system that broke Sweden forty years ago.
The system American politicians describe today is the system that broke Sweden forty years ago.
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The economist who chaired the official commission diagnosing the collapse was Assar Lindbeck. Writing in the Journal of Economic Literature in 1997, he concluded that Sweden had pushed the welfare state past the point where it kept working.
The reforms that followed were not ideological. They were forced by arithmetic.
The reforms that followed were not ideological. They were forced by arithmetic.
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Sweden cut top tax rates. It opened hospitals and schools to private operators while keeping them publicly funded and universally accessible. It opened pensions to private competition. It abolished inheritance and wealth taxes. It restored fiscal discipline.
The country that grew faster than nearly all of Europe in the years that followed did so by walking away from the model Americans still call "Swedish."
The country that grew faster than nearly all of Europe in the years that followed did so by walking away from the model Americans still call "Swedish."
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Sweden is not a libertarian utopia. It is a welfare state running on a capitalist engine. The state still guarantees universal access to healthcare, schools, and pensions. Markets decide who delivers them and at what price.
The country American politicians called proof that socialism works only began working when it stopped doing what they say works.
The country American politicians called proof that socialism works only began working when it stopped doing what they say works.