It´s often said the swedish Anders Borg is Europe’s best finance minister. His response to the crash was a permanent tax cut to speed the recovery. At the time, everyone told him it was madness. Last year, Sweden celebrated the elimination of its deficit. Borg is a numbers man, and famed for his 30 pages — dense arguments for tax cuts, with graphs and complicated maths. Borg was alone, but he had complete faith in the strength of his arguments, which he had rigorously researched.
A ‘supply of workers’ not a ‘supply of jobs’. If welfare pays more than work, why work? He wanted to increase the incentive to work by cutting in-work taxes, creating more people looking for jobs. This is part of his supply-side logic. Borg published a massive book explaining how his reforms will adjust the labour market and lower structural unemployment. Borg’s tax cuts almost entirely paid for themselves. Even Borg, did not quite expect the stimulatory effect of his tax cuts. Subsequent studies suggested that the money saved — in lower dole costs, and extra VAT receipts from people spending their newly-earned money — recouped up to 85 per cent of the cost of the tax cut.
Borg was a rebel, a libertarian, there’s a famous video from the late 1980s when he was on the telly saying that a country’s wealth comes from its people, not its government. And, when asked what he’d do if elected, he replies: ‘If I was prime minister I would not do a damn thing — then people would be free to decide for themselves’.