Tuesday, August 15, 2006

Election Watch: I see a good moon rising

Two things happened today that might be very useful for the Social Democratic campaign.

1. Last Saturday Conservative leader Fredrik Reinfeldt wrote a letter to the three other leaders of the right-wing alliance, suggesting that there is a lot of room for reform during the up-coming four years. Reinfeldt used the figure 100 billion Swedish kronor, and tried to lean against the National Institute of Economic Research.

The National Institute of Economic Research replied today and said that they have never indicated that Sweden’s public finances are ready for that much spending during the next term (2006-2010). To put it simply: Reinfeldt was wrong. False mathematics.

I think and hope that this might be the beginning of a serious debate about whether the right-wing opposition is trustworthy at all. They have promised a lot of new and expensive reforms, and at the same time they promise huge tax cuts. People will realize that this does not make sense: their proposals combined would be a disaster for the Swedish economy.

A Swedish family would never increase their spending every week if the family income was shrinking at the same time. Since Reinfeldt is promising this on a national level, voters will call his bluff.

2. Reinfeldt started the morning today (Tuesday) on public radio, saying that in order to finance the right-wing alliance’s promise to abolish real estate tax, he is considering abolishing the tax deduction you get for your cost of interest. This tax deduction is very important to young people (for example), who just bought a (probably expensive) house.

After the interview Reinfeldt understood what he had said, and I don’t really understand what his position is now, but it seems like he has changed his mind (that is, still abolishing real estate tax, and keeping the tax deductions). Moreover, Reinfeldt is the only Swedish politician getting away when behaving like this. The media would nail any Social Democrat changing his/her mind two times the same day.

This reinforces point one: Reinfeldt promises both reforms and tax cuts, but cannot make ends meet. And he is a true flip-flopper, changing his mind if he happens to say something that did not prove to be popular (like how he aims to pay for his populist economic ideas).

Time to call the bluff.


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