'The country has instituted an overall new incentive structure in society making it more favorable to work. The national debt tumbled from almost 80 percent of GDP in 1995 to only 35 percent in 2010.'<blockquote>'In September of 1992 the Riksbank, Sweden’s central bank, raised the interest rate to 500 percent in a vain attempt to save the fixed exchange rate of the Swedish krona (Sweden’s currency). This drastic measure was taken in conjunction with large spending cuts and tax increases to address the free-fall of the nation’s economy. The economic meltdown was the culmination of two full decades of decline, and it fundamentally changed the political situation in Sweden.
Since 1992, Sweden has, across the board, seen consistent government cutbacks while increasing restrictions on welfare policies, deregulating markets, and privatizing former government monopolies. The country has instituted an overall new incentive structure in society making it more favorable to work. The national debt tumbled from almost 80 percent of GDP in 1995 to only 35 percent in 2010.
In other words, Sweden successfully rolled back its unsustainable but world-renowned welfare state. Despite Krugman’s wishful thinking, this is the real reason for Sweden’s success in riding out the present financial crisis.'
- Per Bylund,
How Government Cutbacks Ended Sweden’s Great Depression, December 25, 2013</blockquote>
Context<blockquote>
(Global) - '..the progress most countries have made in recent decades.'(Germany) - 'Berlin said in May it had a chance of taking on no new debt from 2015.'(Global) - '..how monetary policymakers somehow remained oblivious to the havoc they were instrumental in fomenting.' </blockquote>