[Congressional Record Volume 167, Number 164 (Wednesday, September 22, 2021)]
[Senate]
[Pages S6601-S6602]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                               Socialism

  Mr. GRASSLEY. Mr. President, paraphrasing a philosopher of his era, 
Winston Churchill once said: Those that fail to learn from history are 
doomed to repeat it.
  And I doubt that Churchill was the only one that said that. I think 
we quote other people saying similar things.
  Now, Churchill was himself a devoted student to history. The research 
for his multivolume biography of his ancestor, John Churchill, first 
Duke of Marlborough, likely informed his strategic military thinking as 
Prime Minister during World War II.
  Churchill was also a fierce critic of socialism in his time, and that 
is the main point of my remarks today--talking about socialism.
  Socialism, as we know it today, is based on a different view of 
history than what Churchill had, a history that says we are headed in a 
particular direction, and you just need to see where it is heading to 
``be on the right side of history.''
  Socialism was thought to be the wave of the future in Churchill's 
time, just as it was the wave of the future when Karl Marx was writing 
about it in the mid-1800s. In fact, a wave is an apt analogy for 
socialism. Enthusiasm for socialism has crested and then crashed down 
many, many times in the last couple of centuries.
  Today, some enthusiasts are again riding high on this socialism wave. 
Some of them are too young to know better, while others simply refuse 
to learn the lessons from the previous crashes that socialism has shown 
us.
  Given previous spectacular failures of full-fledged socialism in 
Eastern Europe, Latin America, Asia, and Africa, usually, as we learn, 
resulting in violence, in poverty, and, most importantly, suppression 
of individual rights that we value here in the United States, but also 
advocates of socialism find themselves on the defensive once again.
  When asked why we should try a system that has repeatedly and 
spectacularly failed, a common fallback is to cite Sweden and other 
Nordic countries as examples that we should learn from.
  It may surprise some of my colleagues here in the Senate that this is 
one point where I agree with the socialists. We should examine and 
learn from Sweden's experience. In fact, an excellent summary of 
Sweden's experience from the 1950s to this very day has been compiled 
by the Swedish economist Johan Norberg. His video, which goes by the 
title ``Sweden: Lessons for America,'' is available on YouTube as part 
of the Free to Choose Network. A short paper similarly titled, 
``Sweden's Lesson for America,'' has been published by the Cato 
Institute.
  So I would recommend to all of my colleagues on both sides of the 
aisle paying attention to either that video or that publication by Cato 
because we can learn a lot from Sweden, and it is not what people will 
be espousing here in the U.S. Senate based upon a lot of political 
speeches from those on the left.
  As Norberg points out, by about 1950, Sweden was the fourth richest 
country in the world and had the fifth freest economy. In other words, 
Sweden became wealthy through economic freedom, like we have here in 
America. And then, you know what, Sweden started to adopt socialist 
policies.
  At first, it was just a few welfare programs. But between 1960 and 
1980, government spending in Sweden doubled from 31 percent of gross 
domestic product to 60 percent of gross domestic product, and, of 
course, that meant for all the people in Sweden to pay sky-high taxes.
  This is the time period that older socialists remember so fondly and 
we see espoused here on the Senate floor. Sweden was surfing on top of 
the socialist wave and seemed to have it all: prosperity, massive 
government spending, and a highly regulated economy. However, even the 
best surfers cannot ride a wave forever. All waves eventually come 
crashing down. Sweden's socialist policies started to kill off the 
wealth creation that had made its economy the fourth richest in the 
world. That wealth economy was needed to fund all that government 
spending.
  Norberg points out that Sweden was 10 percent richer than the G7 
countries on a per-capita basis in 1970. But 25 years later, 1995, it 
was more than 10 percent poorer than those same G7 countries. During 
that time, not a single job was created in Sweden's private sector, 
and, more importantly, inflation took away almost all of the value

[[Page S6602]]

of any wage increases during that period of time in Sweden--just as we 
see since the first of the year, inflation eating away so the workers 
today in America do not have a real wage increase.
  As Margaret Thatcher famously said, ``The problem with socialism is 
that you eventually run out of other people's money.''
  One of the most iconic Swedish companies is Ikea. Its stores all 
around the world are painted the color of the Swedish flag. During 
Sweden's experiment with socialism, Ikea moved to the Netherlands and 
is still headquartered there today. Things in Sweden had to change. And 
you know what? By the 1990s, Sweden realized its mistakes going the Big 
Government direction that they went and they reversed course.
  Yes, it did elect a center-right government in the 1990s. But even 
more importantly, the leftwing Swedish socialist democrats also 
recognized their mistake.
  Norberg quotes a Social Democrat Minister of Finance:

       That whole thing with democratic socialism was absolutely 
     impossible. It just didn't work. There was no . . . way to go 
     than market reform.

  So, yes, let us learn from Sweden here in the U.S. Senate, as we are 
considering a $4.2 trillion reconciliation package that builds more 
government programs and entitlement programs, that once you start them 
they never end--because we don't have to go down the socialism road. 
That road is a dead end.

  Yes, Sweden still has much higher government spending and a more 
extensive welfare state than we have in the United States, but in order 
to generate the wealth to pay for it, Sweden now has very pro-growth 
economic policies. Sweden doesn't pretend that they can finance all 
that spending by taxing the rich, like you have constantly heard from 
the Democrat majority in both Houses of this Congress. In fact, 
Sweden's tax code is much less progressive than the Federal 
Government's Tax Code here in the United States. Most Swedish tax 
revenue comes from an income tax system flatter than ours and also from 
a consumption tax.
  Norberg points out that the top 10 percent in Sweden pay less than 27 
percent of the taxes; whereas, in the United States, the top 10 percent 
pay 45 percent of all the income in the Federal Government, and we are 
still hearing that they aren't paying enough. And yet, from the other 
side, I never hear how much more than that 45 percent that segment of 
our economy should pay because maybe there are some people who believe 
it ought to be 100 percent.
  Moreover, taxes on employers and capital are modest in Sweden to 
attract investment and remain competitive on our global stage. The 
Trump tax cuts finally made our corporate income tax competitive with 
Sweden's. Now they want to make the American corporate tax rate yet the 
highest in the world, where it was for a long period of time until 4 
years ago.
  That is right; the Trump tax cuts made corporate tax more like 
Sweden, but now the Democrats want to make it less competitive once 
again. That is right. I am talking about today's Democrats and the 
Biden proposals. By doing so, they are making the mistake that Sweden 
made decades ago that they are now attempting to correct and has done 
so by restoring pro-growth policies.
  As Norberg said, ``You can have a big government, or you can make the 
rich pay for it all. You can't have both.''
  Everybody in Sweden--rich, middle class, and even lower income--pays 
high taxes. That is the deal the Swedes have made. If that is the deal 
Democrats are offering Americans, they should be honest instead of 
pretending it is possible to fund Swedish-style government here in the 
United States by spending through soaking the rich. They should explain 
that hard-working Americans will have to fork over close to half of 
their income to the government in return for the cradle-to-grave 
welfare state benefits. But I think they know that would be very, very 
unpopular here if that is where it ends up, like it did in Sweden 
between 1970 and 1995.
  Now, the United States is not Sweden. Americans, who declared 
independence and fought our Revolutionary War over taxes, are, on the 
whole, much less tolerant of giving over their hard-earned dollars to 
the government to spend.
  I would urge my colleagues across the aisle to learn the lessons from 
Sweden, including their counterparts on the center left in Sweden. Do 
not kill job creation. Do not kill wealth creation. Do not let soaring 
inflation steal the wages of American workers.
  And if you want to look to Sweden, look to the Sweden of today, not 
the Sweden of 1980. Better yet, if you want a model in the region, look 
to Sweden's dynamic neighbor across the Black Sea, Estonia. Its history 
has led it to be even more resistant to the failed, outdated ideology 
of socialism. Estonia has the most competitive tax code in the OECD and 
a fast-growing economy. No wonder it is pushing back on Biden's 
administrative proposal for a global minimum tax. Our actions now will 
determine what kind of life our kids and grandkids will have in the 
future.
  We ought to learn from history so we can shape a brighter future. 
History is clear that economic freedom is the ticket to broad 
prosperity and not socialism.