Successful Socialism: Sweden
I thought this was a good fact-based article describing how heavy govt spending does NOT grow an economy.
When govt spending in Sweden hit 68% of GDP, it's economy went to 0% growth (for 5 years). It was also running govt deficits. At that point the govt acknowledged the problem & began "austerity" measures, among them reducing subsidies for health and dental care (how about that?). They also had very high taxes. It took them 12 years to get back down to their present rate of spending, 37% of GDP. The economy began to grow again when they got down to 49% of GDP. Taxes are now lower than they were during the low-growth period, growth is up, and they are running budget surpluses! Their tax rates are pretty much a flat rate across all income levels.
The conclusion here was:
The sources for the information in the article:
Keynesians tell us that cutting government spending will slow economic growth. The exact opposite happened with Sweden. Once it started cutting spending, its economy started growing: 4% in 1994 and 3.9% in 1995. In the 18 years since it started cutting, Sweden's economy grew at twice its previous rate, even faster than the U.S.'s.