In the midst of the worst global downturn since the Depression, Norway’s economy grew last year by 3%. The government enjoys a budget surplus of 11 percent. By comparison, the U.S. is expected to chalk up a fiscal deficit this year equal to 12.9 percent of its GDP and push its total debt to $11 trillion, or 65 percent of the size of its economy.
Norway is a relatively small country with a largely homogeneous population of 4.6 million and the advantages of being a major oil exporter. It counted $68 billion in oil revenue last year as prices soared to record levels. Even though prices have sharply declined, the government is not particularly worried. That is because Norway avoided the usual trap that plagues many energy-rich countries.
Instead of spending its riches lavishly, it passed legislation ensuring that oil revenue went straight into its sovereign wealth fund, state money that is used to make investments around the world. Now its sovereign wealth fund is close to being the largest in the world, despite losing 23 percent last year because of investments that declined.Norway’s relative frugality stands in stark contrast to Britain, which spent most of its North Sea oil revenue — and more — during the boom years. Government spending rose to 47 percent of G.D.P., from 42 percent in 2003. By comparison, public spending in Norway fell to 40 percent from 48 percent of G.D.P.
The ObamaNation paid lip service to "pay go" at BO's daily live TV appearance. Of course his lips were moving, so he is lying. "Tax & Spend" and the "Great American Entitlement" are destroying the greatest country in the world. The USA is NOT to big to fail. BO needs to learn a lot before he can lead this country from the Great Recession. Perhaps he can start with the socialist Finance Minister of a tiny country which has thrived in a big way by being fiscally responsible and practicing capitalism.
Eirik Wekre, an economist who writes thrillers in his spare time, describes Norwegians’ feelings about debt this way: “We cannot spend this money now; it would be stealing from future generations.”
Norway Thrives by Going Against the Tide - NYTimes.com