Krugman on Denmark

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"The Danes get a lot of things right, and in so doing refute just about everything U.S. conservatives say about economics.[...] Denmark maintains a welfare state — a set of government programs designed to provide economic security — that is beyond the wildest dreams of American liberals. Denmark provides universal health care; college education is free, and students receive a stipend; day care is heavily subsidized. Overall, working-age families receive more than three times as much aid, as a share of G.D.P., as their U.S. counterparts. To pay for these programs, Denmark collects a lot of taxes. The top income tax rate is 60.3 percent; there’s also a 25 percent national sales tax. Overall, Denmark’s tax take is almost half of national income, compared with 25 percent in the United States."

"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.'"