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Home Publications Blogs Beat the Press Denmark Is Not Having Trouble Paying for Its Welfare State

Denmark Is Not Having Trouble Paying for Its Welfare State

Tuesday, 17 August 2010 04:51

Contrary to what the NYT apparently wanted readers to believe when it told them: "But sustaining a benevolent nanny state is proving to be challenging even for the notably generous Danes."

Actually, Denmark's debt to GDP ratio is just over 40 percent, roughly one-third less than the United States. Its deficit for the year will be around 3 percent of GDP, approximately one-third of the size of the U.S. deficit. Denmark has also consistently been running large trade surpluses, building up claims against foreigners in contrast to the United States, which has been running large trade deficits.

Comments (7)Add Comment
written by purple, August 17, 2010 5:15
It is not possible for the US to run surpluses in the current world economy. This is because the dollar acts as a reserve currency, making it overvalued in relation to the competitiveness of US-made products on the world market - something that is diminishing with every year. It's not 1946.

Washington can China-bash all it wants, but China is not the fundamental problem. Everyone knows that tariffs on China would just move production to some other developing country - Mexico, Turkey, Vietnam , Indonesia.

With the introduction of these countries, and others such as India, on the global market, there is no possible way for the U.S. manufacturing to monopolize production globally as the dollar does in international finance. The result is an inevitable hollowing out of the country.
written by izzatzo, August 17, 2010 6:53
"But sustaining a benevolent nanny state is proving to be challenging even for the notably generous Danes."

Once there was a nanny
Of overflowing benevolence
So much to give it hurt to live
By those who fed its extravagance

Who is this beast of burden
That feeds waste,corruption and arrogance
Not I said the Lie, It must be You
The one with hands on My finance

A welfare state on a Danish scale
The kinds that grows and fails
Can't match the one in the USA
That rewards the rich with bail
Purple makes a great point
written by floccina, August 17, 2010 4:10
Purple makes a great point the dollar acts as a reserve currency, making it overvalued. This is a good thing for us in the USA. We are buying a certain amount of things with accounting entries at the treasury and federal reserve. I think this a result of the size of our economy and that we have kept inflation under control. It means that we will generally run a current account balance.

This could be counteracted somewhat if Americans went on a binge of buying more stocks and bonds from other countries.
Hoist by their own numbers
written by McDruid, August 18, 2010 12:29
"Unemployment is at 4.2 percent today"

It must be August. Given that number, why does the Times spend so much ink bewailing Denmark's unemployment benefits? Did the reporter need to justify her trip to Europe this summer?
Give us some time...
written by Jack E Lohman, August 23, 2010 12:37
"America will always do the right thing, but only after everything else fails." Winston Churchill
written by air max, August 24, 2010 8:35
thank you
written by christian louboutin, August 24, 2010 9:14
and air max 95.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.