Free markets v. Socialism - Sweden booming

Sweden has offered its citizens a cradle to grave social safety net for half a century or more.  Liberal unemployment benefits.  Retirement at age 67 with a good pension.  Government funded Health care is provided to the entire population and is consistently rated high in world quality of health care rankings (quite a bit higher than the US).  Their health care costs have run consistently at about 9% of GDP since he 1980's while the US, on the other hand, spends 16% of our GDP on health care and some estimates see that rising to 25% in the future.  The average for western industrialized countries is 8% of GDP (per World Health Organization).


Yet despite offering it's citizens the best of Socialism, and having Government spending in many years account for more than 50% of GDP (meaning very high taxes) Sweden has still managed to have a pretty strong market economy and maintain a high standard or living.


An article in the Economist, (June 11, 2011 (p. 58)) now notes that while the US and England sputter along, Sweden's economy may have grown 6.4% in the first quarter of this year.  The thrust of the economist article is Sweden's coalition government has trimmed the excesses of the socialist safety net while leaving it substantively intact and adding market friendly policies that have encouraged economic growth.   


I always read Economist articles keeping in mind their basic editorial ideology leans a little bit towards being true believers in markets as the solution to all human problems.   What I took away from the article and its statistical and historical facts is that smart policies that recognize what markets do best and also recognize what government does best can provide a strong economic foundation with a strong social safety net.  


Here in the United States our politics are still infected with gut level hatred for any form of socialism.  That hatred is left over from our McCarthy era guilt by association linking socialism to communism, and it has been kept alive by Capitalist true believers to maintain their grip on political power.   As a result we have a market based health care system that is outrageously expensive but still doesn't cover big chunks of the population, the market based portion of our pension system is collapsing from the weight of its speculative excesses (that allowed the very wealthy to skim off the value), and we scramble to keep the long term unemployed afloat.


Sweden has proved over the last half century that you can combine markets and government social programs and have the best of both worlds.