"If Sweden and Germany Became US States, They Would be Among the Poorest States" Can you respond to the article above? There seems to be something wrong with the methodology. However, I cannot put my finger on what it is.
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Regarding your comment about the banking in Sweden: Almost all the banks in Sweden are privately owned except for one bank, Nordea. This bank, however, follows market value principles. However, the central bank in Sweden, Riksbanken, is publicly owned (I believe it is formally owned by the parliament but don’t quote me on that). This gives the country a huge advantage since interest fees on bonds and other loans go back to the state.
However, I think there is a lot to be gained by comparing the financials only, to begin with. Other comparisons may follow.
One very important factor may be to make the comparison per working hour. To illustrate what I mean: As an employee in the public sector (and given my age) I have 35 days/year paid leave, paid sick leave, paternity leave … and so on. It may be possible to include this time in the index in order to acquire a better comparison. However, I am still not sure about the article in question. I still think there is something fishy about the analysis.
So, if I understand you correctly, PPP calculates what I pay for health insurance, social security, pension, insurance … etc. without taking into consideration how much of this money is profit for the insurance company and how much is going to the health care (doctors, nurses, … etc.). The article, however, claims that they take this into account "… take into account taxes, and include social benefits (e.g., “welfare” and state-subsidized health care) as income". Which makes quite uncertain.
One other thing I know about the system in Sweden (I am a Swedish citizen) is that the employer pays a certain fee (translated: employer fee) that is ca. 70% of the salary before taxes. This fee is paid directly to the state and accounts for: pension, health insurance during work and much more. I wonder if the PPP takes this fee into account. What do you think?
several other studies with much different results.