Seems a bit general. Sweden is very much in debt because of the housing market. 15 years ago there were little regulation. You could get a 100 year mortgage with a variable rate and no money down. At the same time the government sold large amounts of public housing at below public market rate. Interest rates went from ~4% to ~1.5%. With no wealth or property taxes, but with tax deductions for renovations and interest rate payments. Most apartment buildings are co-ops, where the co-op have loans as well. Gradually there have been more regulation, but most still have variable rate mortgages which they are personally liable for and with no real a way to declare bankruptcy. Now interest rates will probably reach 4% again so hang on I guess.
Last time I looked at statistics Swedens debt to GDP was 35%, one of the lowest I saw, which doesn’t really make sense to me when I consider the weakness of the currency, but then again I am just a humble engineer and I have no clue about these things.
UK is close to 100% debt to GDP at the moment, the highest in recorded history.
Interest is also partially tax deductible, has been for ages. It makes no sense at all and has only served to fan the flames of an already overheated housing market. It's mostly lingered because nobody wants to be the one to rip off the band-aid. It would have been a very good opportunity to do it when the interest rates were negative, but still no. And at this point, it would it's inconceivable. Tens of thousands of households would be pushed over the brink.
This is such a non-story, mainly driven by the fact that home ownership in Nordic countries is ubiquitous (80% of Norwegians OWN their primary dwelling) combined with the high medium incomes resulting in those houses being quite expensive. I’d really recommend not trying to draw any deeper conclusions from this data.
Edit: by “own” I mean “have a non-paid off mortgage”, the tax on net wealth here actually disincentives paying off a mortgage early vs “leveling up” your debt/house.
I see your clarification. Question: In Norway, if you pay-off your mortgage, do you still owe annual taxes on your property? If so, how much? What happens if you don't pay property taxes?
One of the things that has always bothered me about home "ownership" is that, from my perspective, at least in the US, you never really own your home. You can pay off your mortgage, of course. However, if you stop paying property taxes you can lose your property in a forced sale.
That is not my definition of owning something. If it can be taken away, you do not own it. We have somehow been led to believe we can own property. I don't think that's the case. If you own your property it should mean that you can live there with zero income and have nothing to pay anyone except for the things you want to pay for (power, gas, connectivity, whatever).
Someone might say: We need taxes to pay for X. Well, sure. I get that. We should get that money through other means, not through a system where people work their entire lives to pay off a mortgage only to discover they will have to keep paying to "own" that home for the rest of their lives. Perhaps the distinction should be your residence vs. investment/rental property. Not sure. Haven't through it through much deeper than that.
You have to be careful with that statistic. It's not that 80% of Norwegians own their own home, it's that 80% live in a home that is owned someone in the household. So if you have a single parent, who owns a home, with 3 adult children living in one house, that statistic would say those 4 people have a 100% rate of homeownership. All countries measure it this way.
For example, Singapore has a rate of 91%. However, adults tend to live with their parents until they get married. They'd love to move out before that, but rents are sky high in Singapore, so people tend to just live with their parents. It's also pretty common to have multi-generation households.
> If we consider consumer credit, the welfare-debt theory makes sense again. While consumer credit is more the exception than the norm in Europe, and almost absent in the Nordic countries, it is common in Anglo-liberal countries (UK, US and Canada) where it is used by families as a substitute for poor welfare provision.
Hmm - in Norway here, it's common to see advertising for credit (lots for fixed unsecured loans.) Basically all the grocery store chains except one have their own loyalty credit card. I never watched an episode, but there is a show called Luksusfelle which tries to help people reform their out-of-control finances - I think more than once, credit cards were mentioned. I mean, it's not like the US and the regulatory environment is more consumer-friendly than the US, but I cannot imagine it as non-existent as it is said here.
I am not being coldly statistical here, but it really doesn't match up with a lot of the anecdotal experiences I have.
Not Northern Europe, but Czech Resident here. There has been an explosion in house prices here, a truly wild one. I bought my place for 3.6m CZK about 7 years back and according to a recent valuation practices is "worth" nearly double this now. It is fucking wild, and tbh I kind of hate it.
That has been going on for decades in the Netherlands, I bought a (newly built) home in 1996 when the country still used the Dutch Guilder and sold it for the same amount in €uros in 2002. One Euro translates to 2.21 Guilders, i.e. the house sold for more than double the price in 6 years time. For what I got for a relatively modest semidetached house on 220 m² of land in the Netherlands I could buy a 22 hectare farm in Sweden with money to spare. Ridiculous, that is what it is.
I'm from slovenia, former yugoslavia, and the situation here is the same, making it practically impossible for an average couple to buy anything here (and we're worrying about the demographics, lol).
Back in yugoslav times, government built large apartment building complexes, by basically finding an empty field at the end of the city, saying "this is a city, farms should be outside the city, not within it", and building a complex of apartment buildings, and then another, and then a school/kindergarden, and then two or three more. And by complex I mean literally tens of 5+ story apartment buildings. Since it was socialism, those apartments would be rented out to workers by the government.
On the other hand, people who wanted a house (instead of an apartment) could buy a plot of land, and build houses themselves... and i mean literally themselves... some of them would even dig the basement level by themselves, ask friends for help, every friday after work go to a buildng materials store, fill up their car with a few bags of cement and bricks, lay a layer of two down, and then wait for the next weekend. Fascade, insulation, sometimes even the upper floor could wait for better times, while people moved into the ground floor. Dealing with permits and papers was a thing "to deal with later".
Then came independence, the government didn't want to deal with so many apartments and sold them to renters for a price of a mid-range car.
And the current generations? Fucked. Like totally.
A field right next to the roundway around the city? Sure [1]. Next to highrises? Sure [2]. New large apartment complexes? Nope. want to buy a few houses and build a larger apartment building? You better literally be friends with the mayor, since zoning doesn't allow more than two-floor two-apartment buildings. Want to build on an empty field? Nope, zoning doesn't allow it.
People complain we literally need tens of thousands of new apartments, and all that's being built is ~4 "luxury" apartment buildings in relatively shitty locations (but still better than nothing) and every now and then someone gets a blessing from the mayor to build a 6-8 apartment building in a place where an old house once was. ...and then those apartments are bought up for way above what they're worth by people who then rent them out via airbnb.
What if you're magically somehow able to aquire some land where it's allowed to build stuff? Permits and other papers take years. Want to build yourself? Nope, no way. Want friends to help? If they're not licenced contractors and giving out receipts, they're considered as working illegaly and inspections check those things a lot.
Add to this some NIMBYism, where the neigbor complains if you're building a house there, and the situation is even worse.
And public housing? The government built one complex of those, and the build-price was higher than retail price a few years before it was built (like 2800eur/m^2)... because well, government and corruption.
So yeah...
In the end, this is how you get revolutions and terrorism... You're a good worker, save money, save 10k eur in a year (a lot for most), and the apartments you were looking at are 30k more than last year. Why bother? People have nothing left to lose, because the average rent is above average pensions, so without something huge changing soon, a lot of people will be homeless and literally without anything to lose anymore.
As always with debt, how bad it is very much depends on the interest rate of the loans.
I bought an apartment here in Sweden a couple of years ago with the minimal required down payment (kontantinsats) of 15%, but 20% of my debt is still my student loan that currently has an interest rate of 0.59% (it was 0% a few years ago).
I will say that the housing loans here have one potential issue though: it's very common to have a variable (or only 2 year fixed) interest rate on your loan, so Swedish borrowers will notice increased interest rates much sooner than borrowers in countries where 5+ year fixed rates are common.
Around 80% of new loans for house purchases here have their initial rate fixed for only 1 year or shorter [1].
The other interesting thing is that South Europe in general has a longer history of financing public works like churches, than Northern Europe, but in terms of household debt, that relationship seems inverted.
It's my understanding that the northern European countries have very low immigration rates which means that their existing (mostly native) population is entirely responsible for their economic growth. That population grows old and fewer and fewer young people are available to contribute to the state-funded "welfare" to support their parents retired lifestyles. So the debt accrues and the country eventually becomes a "welfare state" with young people paying 50-60% of their income to taxes.
It depends on the country. Sweden and Norway have a larger share of foreign-born population than the US and the UK. Netherlands is roughly on the same level as the US and the UK, while Denmark and Finland have fewer immigrants.
> It's my understanding that the northern European countries have very low immigration rates
Your understanding is wrong, immigration is rampant in Sweden with around 150.000 people (about 1.3% of the population) coming in every year. Some 25% of the population was born outside of the country by now, this number is only growing. Germany and the Netherlands also see very high migration although the numbers are a bit lower seen relative to the population. While these newcomers do contribute to a younger population they also have made the male-female distribution quite lopsided since the vast majority of migrants is male. Sweden now has the same problems as China has there with about 116 males for every 100 females in the 16-18yo age bracket - these numbers may be off by a bit (i.e. the difference may have grown) since I last checked these statistics a few years ago. Unfortunately the employment statistics do not look good for these newcomers which have trouble getting into the Swedish labour market with its high requirements on education which actually only increases the problems the country has in keeping the welfare state up and running. Pension ages are going up to compensate for this which goes against what the population was told when they were faced with a large influx of newcomers who were supposedly 'necessary for the future of the welfare state'. Had this been the case that welfare state would be a Ponzi scheme and any newcomer who was foolish enough to fall for the lure would end up working for benefits he would be sure never to get. In reality it is those who have already worked to build up the welfare state who get to pay for a large fraction of the newcomers - e.g. Somalian immigrants to Sweden are only ~20% self-supporting with the rest depending on government benefits, 37% of migrants from Africa and the Middle East - who make up the majority of non-EU migrants coming to Sweden - were self-supporting in 2016 with the other 63% being dependent on government benefits. The Swedish welfare state will need to be reformed or it will not survive.
The explanation here still wasn't clear to me after several readings. They're showing that a bias towards social spending on the elderly was co-related with higher overall debt. But I'm unclear on their explanation.
Given they're talking about mortgage debt in particular, would like to see plotted against housing prices.
Especially curious if certain kinds social spending helps shore up baseline housing prices by increasing aggregate spending, by putting more cash in the system but also by reducing foreclosures/bankruptcies.
And most importantly, if seniors can stay in their homes longer -- because of adequate pension systems -- that means less houses dumped on the market. "Selling the family home so I can afford to retire" (aka downsizing) is a pretty common maneuver in the Anglo-American economies [where pensions are dubious]. When all the baby boomers finally liquidate their real estate assets, it should be interesting to see what happens to housing prices. in North America
I read it like welfare spending towards young caused the higher debt taking. Countries which had the bias towards elderly don’t encourage to take loans.
Also I’ve found that housing prices follow closely the ability to take loans up here.
I was getting some ideas from the text. Scandinavian countries have probably the world's best institutions. I'm talking here specifically about courts, laws, police. Also lack of corruption, excellent education, and a good labor market. In a world like this, debt becomes really just a number on paper. They can take huge mortgages and pass them on to their children (alongside with the property of course).
One of the larger crimes here in Denmark, is that debt for example for homes are tax deductible, so basically, it allows banks to make more profit, by letting the state cover some of the expense of taking out a loan.
There's an old song "if you have money, you can buy, if you don't you can leave", people need to sing this to their kids a bit more often.
We're an incredibly wealthy society, and yet, most people chose to live above their means.. Loaning money for cars and homes instead of simply buying cheaper ones.
The last house I bought, I paid in cash, because it cost less than the down payment for many of the homes other people in my income bracket typically buy.
The last car I bought cost less than the service-check for the tesla that some of the other people in my income bracket..
Living below ones means in Denmark is trivial, and yet, people feel they're too good to live within their means, it's a cultural problem.
When you live in a stable society and have gotten a free education and a nice job, it makes sense to get a loan to buy a place to live and start paying a mortgage instead of debt.
Contrast with a society where the average education might be lower, less people having a stable job in a slow labor market, and if you lose your job there is no safety net. Hard to get a loan, so end up renting for longer, and in turn have a lower average debt.
Debt can be a proxy for a well working society, as you have the means to invest in your future, not just putting out short term fires.
> When you live in a stable society and have gotten a free education and a nice job
The education isn't free. It's covered by taxes so you, and everyone else, pays for it for a long time. There's quite an expense to have the instructors, buildings, etc.
I'm glad you think the people who haul away garbage, are plumbers, are electricians, etc have nice jobs. Those jobs exist and people do them in those stable societies.
> paying a mortgage instead of debt
A mortgage is a form of debt.
> Contrast with a society where the average education might be lower, less people having a stable job in a slow labor market, and if you lose your job there is no safety net.
This is where things get weirdly complicated. Where I live there are safety nets. The state has said that only about 10% of what's available is used. Where there are safety nets many people don't try to use them. I know people who complained about a lack of safety nets and didn't take advantage of the ones available to them.
> Hard to get a loan, so end up renting for longer, and in turn have a lower average debt.
It's far more complex than that. For example, businesses are buying homes up for far more than asking price and what most people can pay. So they can turn around and rent them. This is all driving up the asking price for homes.
> Debt can be a proxy for a well working society, as you have the means to invest in your future, not just putting out short term fires.
This really depends on where debt is. In the US a lot of debt is to fuel consumerism. Or, to have more things now. A lot of the parts of society drive people to this. It's become cultural.
I’m not sure this accounts for it. Paying a mortgage “instead” implies it’s merely a replacement. But in reality the debt is 2-4x higher than other OECD countries.
This stat makes it sound rather unsustainable:
>Four in 10 mortgage borrowers in Sweden are not paying off their debt, and those that are repaying the principal do so at a rate that would on average take nearly a century.
> Contrast with a society where the average education might be lower, less people having a stable job in a slow labor market, and if you lose your job there is no safety net.
Educational attainment in the Nordic countries isn't actually that good. It might have been at one point. These days I think it sometimes looks good because some statistics count having any experience at higher levels, which having cost-free education facilitates. If you instead look at actual degrees the Nordic countries are average among OECD countries.
Bachelor's degrees
OECD Average 18%
Iceland 21%
Denmark 20%
Norway 20%
Sweden 18%
Finland 20%
Countries above 21% in OECD: Australia, Belgium, Canada, Colombia, Greece, Ireland, Israel, Japan, Korea, Lithuania, Netherlands, New Zealand, Switzerland, United Kingdom, United States.
Also, most europeans tend to settle down, and not move across the continent every few years, so buying instead of renting makes even more sense, since you'll be staying in that house probably for the rest of your life.
Many of the reactions here seem rather defensive. Observing that mortgages are the main driver isn’t some takedown of the article. It makes the exact same observation.
I find it highly difficult to figure out what the article is trying to say. This especially as it's trying to say something about private debt vs the welfare system. I don't understand what the article is trying to say, especially the link between welfare system vs mortgages vs debt.
[+] [-] sohtym|3 years ago|reply
[+] [-] dijit|3 years ago|reply
UK is close to 100% debt to GDP at the moment, the highest in recorded history.
[+] [-] belter|3 years ago|reply
[+] [-] marginalia_nu|3 years ago|reply
[+] [-] 1B05H1N|3 years ago|reply
[+] [-] nonethewiser|3 years ago|reply
[+] [-] cronin101|3 years ago|reply
Edit: by “own” I mean “have a non-paid off mortgage”, the tax on net wealth here actually disincentives paying off a mortgage early vs “leveling up” your debt/house.
[+] [-] robomartin|3 years ago|reply
I see your clarification. Question: In Norway, if you pay-off your mortgage, do you still owe annual taxes on your property? If so, how much? What happens if you don't pay property taxes?
One of the things that has always bothered me about home "ownership" is that, from my perspective, at least in the US, you never really own your home. You can pay off your mortgage, of course. However, if you stop paying property taxes you can lose your property in a forced sale.
That is not my definition of owning something. If it can be taken away, you do not own it. We have somehow been led to believe we can own property. I don't think that's the case. If you own your property it should mean that you can live there with zero income and have nothing to pay anyone except for the things you want to pay for (power, gas, connectivity, whatever).
Someone might say: We need taxes to pay for X. Well, sure. I get that. We should get that money through other means, not through a system where people work their entire lives to pay off a mortgage only to discover they will have to keep paying to "own" that home for the rest of their lives. Perhaps the distinction should be your residence vs. investment/rental property. Not sure. Haven't through it through much deeper than that.
[+] [-] refurb|3 years ago|reply
You have to be careful with that statistic. It's not that 80% of Norwegians own their own home, it's that 80% live in a home that is owned someone in the household. So if you have a single parent, who owns a home, with 3 adult children living in one house, that statistic would say those 4 people have a 100% rate of homeownership. All countries measure it this way.
For example, Singapore has a rate of 91%. However, adults tend to live with their parents until they get married. They'd love to move out before that, but rents are sky high in Singapore, so people tend to just live with their parents. It's also pretty common to have multi-generation households.
[+] [-] bigpeopleareold|3 years ago|reply
Hmm - in Norway here, it's common to see advertising for credit (lots for fixed unsecured loans.) Basically all the grocery store chains except one have their own loyalty credit card. I never watched an episode, but there is a show called Luksusfelle which tries to help people reform their out-of-control finances - I think more than once, credit cards were mentioned. I mean, it's not like the US and the regulatory environment is more consumer-friendly than the US, but I cannot imagine it as non-existent as it is said here.
I am not being coldly statistical here, but it really doesn't match up with a lot of the anecdotal experiences I have.
[+] [-] smcl|3 years ago|reply
[+] [-] chrisco255|3 years ago|reply
[+] [-] the_third_wave|3 years ago|reply
[+] [-] rayiner|3 years ago|reply
[+] [-] ajsnigrutin|3 years ago|reply
I'm from slovenia, former yugoslavia, and the situation here is the same, making it practically impossible for an average couple to buy anything here (and we're worrying about the demographics, lol).
Back in yugoslav times, government built large apartment building complexes, by basically finding an empty field at the end of the city, saying "this is a city, farms should be outside the city, not within it", and building a complex of apartment buildings, and then another, and then a school/kindergarden, and then two or three more. And by complex I mean literally tens of 5+ story apartment buildings. Since it was socialism, those apartments would be rented out to workers by the government.
On the other hand, people who wanted a house (instead of an apartment) could buy a plot of land, and build houses themselves... and i mean literally themselves... some of them would even dig the basement level by themselves, ask friends for help, every friday after work go to a buildng materials store, fill up their car with a few bags of cement and bricks, lay a layer of two down, and then wait for the next weekend. Fascade, insulation, sometimes even the upper floor could wait for better times, while people moved into the ground floor. Dealing with permits and papers was a thing "to deal with later".
Then came independence, the government didn't want to deal with so many apartments and sold them to renters for a price of a mid-range car.
And the current generations? Fucked. Like totally.
A field right next to the roundway around the city? Sure [1]. Next to highrises? Sure [2]. New large apartment complexes? Nope. want to buy a few houses and build a larger apartment building? You better literally be friends with the mayor, since zoning doesn't allow more than two-floor two-apartment buildings. Want to build on an empty field? Nope, zoning doesn't allow it.
People complain we literally need tens of thousands of new apartments, and all that's being built is ~4 "luxury" apartment buildings in relatively shitty locations (but still better than nothing) and every now and then someone gets a blessing from the mayor to build a 6-8 apartment building in a place where an old house once was. ...and then those apartments are bought up for way above what they're worth by people who then rent them out via airbnb.
What if you're magically somehow able to aquire some land where it's allowed to build stuff? Permits and other papers take years. Want to build yourself? Nope, no way. Want friends to help? If they're not licenced contractors and giving out receipts, they're considered as working illegaly and inspections check those things a lot.
Add to this some NIMBYism, where the neigbor complains if you're building a house there, and the situation is even worse.
And public housing? The government built one complex of those, and the build-price was higher than retail price a few years before it was built (like 2800eur/m^2)... because well, government and corruption.
So yeah...
In the end, this is how you get revolutions and terrorism... You're a good worker, save money, save 10k eur in a year (a lot for most), and the apartments you were looking at are 30k more than last year. Why bother? People have nothing left to lose, because the average rent is above average pensions, so without something huge changing soon, a lot of people will be homeless and literally without anything to lose anymore.
[1] https://goo.gl/maps/iL7962VtEzThwgAb8 [2] https://goo.gl/maps/6Do3W3KWXWKpxw1DA
[+] [-] jahnu|3 years ago|reply
https://www.washingtonpost.com/business/denmarks-mortgage-ma...
[+] [-] DavidVoid|3 years ago|reply
I will say that the housing loans here have one potential issue though: it's very common to have a variable (or only 2 year fixed) interest rate on your loan, so Swedish borrowers will notice increased interest rates much sooner than borrowers in countries where 5+ year fixed rates are common.
Around 80% of new loans for house purchases here have their initial rate fixed for only 1 year or shorter [1].
[1] https://sdw.ecb.europa.eu/quickview.do;jsessionid=3DC3C894DA...
[+] [-] jopsen|3 years ago|reply
But the variable mortgages are a bit sketchy, they could very well be a bomb under housing market -- and could cause prices to collapse.
[+] [-] nonethewiser|3 years ago|reply
[+] [-] viking1066|3 years ago|reply
For example USA and Germany seems to have about the same level of household debt, but USA has 65% home ownership rate, while Germany has only 51%.
https://en.wikipedia.org/wiki/List_of_countries_by_home_owne...
The other interesting thing is that South Europe in general has a longer history of financing public works like churches, than Northern Europe, but in terms of household debt, that relationship seems inverted.
[+] [-] VWWHFSfQ|3 years ago|reply
[+] [-] whitemary|3 years ago|reply
> Total Fertility Rate (TFR) is a more direct measure of the level of fertility than the crude birth rate, since it refers to births per woman.
[+] [-] jltsiren|3 years ago|reply
[+] [-] the_third_wave|3 years ago|reply
Your understanding is wrong, immigration is rampant in Sweden with around 150.000 people (about 1.3% of the population) coming in every year. Some 25% of the population was born outside of the country by now, this number is only growing. Germany and the Netherlands also see very high migration although the numbers are a bit lower seen relative to the population. While these newcomers do contribute to a younger population they also have made the male-female distribution quite lopsided since the vast majority of migrants is male. Sweden now has the same problems as China has there with about 116 males for every 100 females in the 16-18yo age bracket - these numbers may be off by a bit (i.e. the difference may have grown) since I last checked these statistics a few years ago. Unfortunately the employment statistics do not look good for these newcomers which have trouble getting into the Swedish labour market with its high requirements on education which actually only increases the problems the country has in keeping the welfare state up and running. Pension ages are going up to compensate for this which goes against what the population was told when they were faced with a large influx of newcomers who were supposedly 'necessary for the future of the welfare state'. Had this been the case that welfare state would be a Ponzi scheme and any newcomer who was foolish enough to fall for the lure would end up working for benefits he would be sure never to get. In reality it is those who have already worked to build up the welfare state who get to pay for a large fraction of the newcomers - e.g. Somalian immigrants to Sweden are only ~20% self-supporting with the rest depending on government benefits, 37% of migrants from Africa and the Middle East - who make up the majority of non-EU migrants coming to Sweden - were self-supporting in 2016 with the other 63% being dependent on government benefits. The Swedish welfare state will need to be reformed or it will not survive.
[+] [-] cmrdporcupine|3 years ago|reply
Given they're talking about mortgage debt in particular, would like to see plotted against housing prices.
Especially curious if certain kinds social spending helps shore up baseline housing prices by increasing aggregate spending, by putting more cash in the system but also by reducing foreclosures/bankruptcies.
And most importantly, if seniors can stay in their homes longer -- because of adequate pension systems -- that means less houses dumped on the market. "Selling the family home so I can afford to retire" (aka downsizing) is a pretty common maneuver in the Anglo-American economies [where pensions are dubious]. When all the baby boomers finally liquidate their real estate assets, it should be interesting to see what happens to housing prices. in North America
[+] [-] plastic3169|3 years ago|reply
Also I’ve found that housing prices follow closely the ability to take loans up here.
[+] [-] thedudeabides5|3 years ago|reply
[+] [-] mo_42|3 years ago|reply
[+] [-] dusted|3 years ago|reply
There's an old song "if you have money, you can buy, if you don't you can leave", people need to sing this to their kids a bit more often.
We're an incredibly wealthy society, and yet, most people chose to live above their means.. Loaning money for cars and homes instead of simply buying cheaper ones.
The last house I bought, I paid in cash, because it cost less than the down payment for many of the homes other people in my income bracket typically buy.
The last car I bought cost less than the service-check for the tesla that some of the other people in my income bracket..
Living below ones means in Denmark is trivial, and yet, people feel they're too good to live within their means, it's a cultural problem.
[+] [-] layer8|3 years ago|reply
[+] [-] layer8|3 years ago|reply
[+] [-] adaml_623|3 years ago|reply
And figure 2. is based on data from 2007
And figure 3. is comparing very different things on the same diagram.
If this were an undergraduate project I would not give it a pass.
[+] [-] gus_massa|3 years ago|reply
a) Million Dollars? Billions? Trillions?
b) Idem
c) Percent of the population? Is .6 on the left a 60% of the population or .6% of the population?
d) Percent of the welfare budget? Is .6 on the left a 60% of the budget or .6% of the budget?
[+] [-] matsemann|3 years ago|reply
Contrast with a society where the average education might be lower, less people having a stable job in a slow labor market, and if you lose your job there is no safety net. Hard to get a loan, so end up renting for longer, and in turn have a lower average debt.
Debt can be a proxy for a well working society, as you have the means to invest in your future, not just putting out short term fires.
[+] [-] mfer|3 years ago|reply
The education isn't free. It's covered by taxes so you, and everyone else, pays for it for a long time. There's quite an expense to have the instructors, buildings, etc.
I'm glad you think the people who haul away garbage, are plumbers, are electricians, etc have nice jobs. Those jobs exist and people do them in those stable societies.
> paying a mortgage instead of debt
A mortgage is a form of debt.
> Contrast with a society where the average education might be lower, less people having a stable job in a slow labor market, and if you lose your job there is no safety net.
This is where things get weirdly complicated. Where I live there are safety nets. The state has said that only about 10% of what's available is used. Where there are safety nets many people don't try to use them. I know people who complained about a lack of safety nets and didn't take advantage of the ones available to them.
> Hard to get a loan, so end up renting for longer, and in turn have a lower average debt.
It's far more complex than that. For example, businesses are buying homes up for far more than asking price and what most people can pay. So they can turn around and rent them. This is all driving up the asking price for homes.
> Debt can be a proxy for a well working society, as you have the means to invest in your future, not just putting out short term fires.
This really depends on where debt is. In the US a lot of debt is to fuel consumerism. Or, to have more things now. A lot of the parts of society drive people to this. It's become cultural.
[+] [-] dmos62|3 years ago|reply
[+] [-] nonethewiser|3 years ago|reply
But a mortgage is debt … ?
I’m not sure this accounts for it. Paying a mortgage “instead” implies it’s merely a replacement. But in reality the debt is 2-4x higher than other OECD countries.
This stat makes it sound rather unsustainable:
>Four in 10 mortgage borrowers in Sweden are not paying off their debt, and those that are repaying the principal do so at a rate that would on average take nearly a century.
https://www.cnbc.com/amp/2014/08/24/swedish-household-debt-s...
[+] [-] sohtym|3 years ago|reply
Educational attainment in the Nordic countries isn't actually that good. It might have been at one point. These days I think it sometimes looks good because some statistics count having any experience at higher levels, which having cost-free education facilitates. If you instead look at actual degrees the Nordic countries are average among OECD countries.
Countries above 21% in OECD: Australia, Belgium, Canada, Colombia, Greece, Ireland, Israel, Japan, Korea, Lithuania, Netherlands, New Zealand, Switzerland, United Kingdom, United States.Source: https://www.oecd-ilibrary.org/sites/b35a14e5-en/1/3/2/1/inde...
[+] [-] sacnoradhq|3 years ago|reply
It's stability of ability to service debt that matters, not the debt itself.
High debt / income ratio at the micro level is bad, of course.
[+] [-] ajsnigrutin|3 years ago|reply
[+] [-] nonethewiser|3 years ago|reply
[+] [-] bkor|3 years ago|reply
I find it highly difficult to figure out what the article is trying to say. This especially as it's trying to say something about private debt vs the welfare system. I don't understand what the article is trying to say, especially the link between welfare system vs mortgages vs debt.
[+] [-] jakub_g|3 years ago|reply
[+] [-] mikaeluman|3 years ago|reply
"Why Northern Europe is so indebted" sounds like clickbait...
[+] [-] nonethewiser|3 years ago|reply
[+] [-] mikl|3 years ago|reply
The cheaper it is to borrow money, the more people borrow, unsurprisingly.
This is what’s been driving the massive rises in property prices the last many years. It’s straight out of “Economic Bubble Creation 101”.