As Krugman writes:
Describe these policies to any American conservative, and he would predict ruin. Surely those generous benefits must destroy the incentive to work, while those high taxes drive job creators into hiding or exile.
Strange to say, however, Denmark doesn’t look like a set from “Mad Max.” On the
contrary, it’s a prosperous nation that does quite well on job creation. In fact, adults in their prime working years are substantially more likely to be employed in Denmark than they are in America. Labor productivity in Denmark is roughly the same as it is here, although G.D.P. per capita is lower, mainly because the Danes take a lot more vacation.
Nor are the Danes melancholy: Denmark ranks at or near the top on international comparisons of “life satisfaction.”
It does make you wonder how some economists and politicians become obsessed with the idea that "anti-tax, anti-government" is the only possible way to run a successful modern nation.It’s hard to imagine a better refutation of anti-tax, anti-government economic doctrine, which insists that a system like Denmark’s would be completely unworkable.