06-07-2016, 02:53 PM
There is another article on Denmark (see below) out which is busting numerous market fundamentalist myths,it's quite interesting. Here a few relevant quotes:
We might add to that the size of the public sector:
![[Image: denmark-government-spending-to-gdp.png?s...604271809n]](http://cdn.tradingeconomics.com/charts/denmark-government-spending-to-gdp.png?s=denmarkgovspetogdp&v=201604271809n)
Of course the big jump from 2008 to 2009 was of course caused by the financial crisis as growth took a hit.
But Denmark, with its wealth, its low unemployment and high score on happiness shows that a big public sector isn't necessarily dooming countries or the first step on the road to serfdom.
Here is another quote from the article that is quite noteworthy:
Rightwingers blame the central bank and/or government (the CRA, the Community Reinvestment Act, or Fannie and Freddie, this is all nonsense, see here) for the US housing bubble, and they basically want to abolish all much regulation.
The Danish experience shows that the reverse is much better. Denmark has starkly negative interest rates (-0.65% at the moment, to keep the Krona tied to the euro) but smart regulation keeps the property market from bubble territory (let alone having anything like the whole mortgage securitization industry that turned the mortgage business into a volume business in the US, where nobody had any vested interest to monitor credit risk)
Quote:Despite a minimum wage not far below $20 an hour and some of the world’s steepest taxes, unemployment is almost the lowest in Europe.
We might add to that the size of the public sector:
Of course the big jump from 2008 to 2009 was of course caused by the financial crisis as growth took a hit.
But Denmark, with its wealth, its low unemployment and high score on happiness shows that a big public sector isn't necessarily dooming countries or the first step on the road to serfdom.
Here is another quote from the article that is quite noteworthy:
Quote:[b]Compared with New York, London, and even Stockholm, Copenhagen real estate is still a bargain: $500,000 buys a decent two-bedroom. If Berg is correct, that’s largely because the country regulates the housing market to a degree unimaginable in the U.S.[/b] It’s nearly impossible for a foreigner with no connection to Denmark to buy property, preventing inflows of overseas money. Banks apply stringent financial criteria to mortgages for buy-to-let properties; it’s hard for Danes to purchase homes they don’t intend to live in. Regulatory guidelines require minimum down payments of 5 percent and stress tests of borrowers’ finances against runups in rates. With the encouragement of regulators, banks have hiked fees on flexible-rate loans, nudging buyers into fixed-rate mortgages. The rules are even tighter for properties in Copenhagen.
Rightwingers blame the central bank and/or government (the CRA, the Community Reinvestment Act, or Fannie and Freddie, this is all nonsense, see here) for the US housing bubble, and they basically want to abolish all much regulation.
The Danish experience shows that the reverse is much better. Denmark has starkly negative interest rates (-0.65% at the moment, to keep the Krona tied to the euro) but smart regulation keeps the property market from bubble territory (let alone having anything like the whole mortgage securitization industry that turned the mortgage business into a volume business in the US, where nobody had any vested interest to monitor credit risk)