Sweden is not all that it's crack up to be. Not a terrible economic basket case, at least not yet. In fact it's welfare state model, built mostly for a uni-cultural society, works a lot better than the French or German one. Sweden encourages people to get back into the work force a lot quicker than the continentals. However, there are some underlying problems.
How Sweden handles increased internation competition as it moves to a more multicultural society is an experiment worth watching.The political left has for many years portrayed Sweden as the ideal liberal experiment; a nation that has maintained a vital market economy alongside a large welfare state. Many Americans and Europeans alike seem to see our system as a proof that you can achieve full employment despite rigid labor markets, and very high labor discouraging taxes and benefits.
In reality, Sweden has considerable economic problems as its population has adjusted to the many years with welfare politics and is increasingly taking advantage of government programs. High taxation, extensive regulations and comprehensive systems of government handouts discourages individuals from work and have resulted in a drop in entrepreneurship and working ethics. The best estimates of true unemployment figures for Sweden are somewhere around 20 percent, almost four times higher than the more flexible U.S. economy. Note here that discouraged workers and those who are underemployed are not included in either country, but that the figures are again higher in Sweden than in the United States.
The problems with high unemployment, low working morals, lack of entrepreneurship and dependence on government programs are not unique for Sweden, but shared with other European welfare states such as France and Germany. In all three countries, voters are dissatisfied with the ruling political parties, but as many are dependent on government handouts, few are willing to accept reforms that scale down the size of government benefits.
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