Denmark Is Not Having Trouble Paying for Its Welfare State

August 17, 2010

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.

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