The U.S. will never be able to afford the kind of welfare benefits enjoyed by Europeans unless it raises taxes, Swedish Prime Minister Fredrik Reinfeldt said.
“It’s not sustainable for a country to try to have European levels of expenditure with taxation levels like the United States has,” Reinfeldt said today in an interview with Bloomberg Television’s Francine Lacqua in Davos, Switzerland. “That’s not possible.”
Cradle-to-grave welfare doesn’t need to erode public finances provided a sustainable revenue policy is in place, Reinfeldt said. The largest Nordic economy, which has the second-highest tax burden of industrialized countries after Denmark, has reduced its debt load as a percentage of gross domestic product every year since 2009. The U.S. has the fourth- smallest tax burden relative to GDP, after Mexico, Chile and Turkey, according to figures provided by the Paris-based Organization for Economic Cooperation and Development.
In the U.S., lawmakers have struggled to strike a balance between spending and taxation, bringing Congress close to testing the nation’s debt ceiling a second time since 2011.