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Unhappy in the World’s Happiest Country
I was sitting in a coffee shop in Copenhagen, Denmark ruining my vacation. For about the hundredth time I found myself calculating how much the trip was costing, and whether, as a retiree, I had saved enough not to outlive my money. At the end of life I was likely to face tens of thousands of nursing home expenses, with years of increasing medical expenses on the way down. Then there was inflation and a tottering Social Security and Medicare situation to worry about. My expensive coffee was getting cold.
I looked around the room full of Danes and realized something. No matter what else, not a single one of them could be worrying about anything close to what I was. Every Dane gets free universal health care, free public schools and universities, pensions, generous unemployment insurance, and more or less cost-free elder care. The mom looking at pastries enjoys heavily subsidized child care. The things that shadowed my life, such as paying for child care and then trying to figure out how to pay for college without burdening my kids with life-long student loans, were not a factor here. Was I going to doom myself to tax hell by withdrawing from the Roth IRA and traditional IRA in the wrong order? Do I have to pay someone I never budgeted for to advise me how to get access to my own money saved over a lifetime of denying myself and my family so there would be something there? I was not a happy guy.
I approached the mom for someone to talk to. She was curious to meet a tourist, and like most people I met, friendly and open. The presumptions that govern a stranger approaching you in a big American city did not apply. I asked her if she was happy, and she replied indeed she, and most Danes, were. I looked it up later; 4 of the 5 happiest nations on earth are in Scandinavia, with Denmark at number 2. The U.S. is down at 24th, with Afghanistan understandably ranking globally as the unhappiest place.
I wanted to know why Danes might be so happy. I turned the topic to one of my biggest worries, healthcare, attracting the attention of an older man nearby (and of course everyone spoke English. Denmark consistently ranks among the world’s best non-native English-speaking countries, the product of an excellent public school system that starts language training in kindergarten). I practically had them in tears laughing as I tried to explain how healthcare works in America, with its HMOs, PPOs, Obamacare, Medicare, copays, deductibles, in and out of network, and more. I told them after paying Medicare taxes all my working life I still had to pay several hundred dollars more each month in retirement (plus a new form of income tax called IRMAA) for a health insurance system that covers most Americans so incompletely that those that can afford it have to buy private supplemental insurance, as well as paying copays for most doctor visits. And this is after you figure out the Medicare system itself, a complex mess that requires you to choose among Parts A-D. And if you don’t sign up for Medicare “on time,” you will have a penalty attached to your premiums for the rest of your life.
Then I tried to explain retirement. It starts with choosing when to start collecting your Social Security in America; if you take it at age 62 you get less money each month for more months, versus age 70 when you get more money but for less months, because you die. The cut-off age to balance the choices is somewhere around 80-something, so you have to make an irrevocable decision estimating your own death. Same ghoulish calculation for my meager pension. I agreed to take less each money betting I’ll die before my wife, leaving some for her as a widow.
In Denmark every person gets healthcare. They usually pay nothing. Some do buy supplemental insurance for faster access to specialists, but it is through a non-profit organization. Old age pensions are supported by a combination of taxes and mandatory occupational pension contributions. Together the entire multi-level retirement system replaces up to 80 percent of former wages. In the U.S. the average worker sees about 35 percent replaced, higher lifetime earners as low as 20 percent. There are very low rates of elderly poverty in Denmark, and because significant retirement income comes from pre-funded occupational pension funds held for you by the government like a 401(k) you pay directly into while working, it reduces pressure on future taxpayers. This is wholly unlike the American system which may soon run out of money or reduce benefits to stay solvent.
We pivoted to the big question of taxes. I explained I had read if the U.S. tax code were made into an audiobook, it would take roughly 19 days of continuous listening around the clock to finish. The entire code is roughly 4.26 million words long. Americans spend hours doing their taxes themselves, usually with the aid of expensive software, or spend hundreds of dollars or more paying CPAs and tax professionals to do the task for them. For Danes the tax agency prepares an annual tax assessment using the information it has already received from banks, mortgage companies, investment firms, and the like. Taxpayers log into the government’s online system and review the return, approving it electronically or in rare cases, making changes. For most, the process takes only a few minutes and is stress-free. People, my tablemates told me, tend to trust their government, perhaps the most shocking thing I learned this day. Americans often don’t appreciate trust itself can be an economic asset.
Like most Americans, I assumed the taxes must be crushing. I had to look up later how much Danes pay in taxes and try to compare it to the U.S. It is a complex question. But to try and bring some clarity to all this, OECD calculations set the average tax wedge Americans pay at about 30 percent. For Denmark, the same OECD study shows a single worker earning an average wage faces a tax wedge of 36 percent. But in return Danes receive guaranteed universal health care, free public schools and universities, pensions, generous unemployment insurance, child care and family benefits, and elder care. Americans pay for all of those things in addition to taxes and the anxiety of not knowing if things will work out. Most Danes also get five or more weeks of paid vacation per year. I think the Danes are getting a better deal, and that helps make them happy.
I was left angry about our system, our way of life actually, that places so much emphasis on making the right choices or personally suffering the consequences, and paying so much for as little as we often get. It is easy to see how much psychological burden Americans carry, especially financial stress, right until our deaths relieve us. Most every financial decision seems to come with the possibility of ruining my future. That simply does not exist in the same way in places like Denmark, or the other Scandinavian countries, or to a lesser degree even in Canada or Japan. Why can’t we live this way, I wondered as our informal coffee club broke up.
Walking back through rainy Copenhagen, I realized something. I hadn’t spent the afternoon envying Denmark’s architecture or museums or bicycle culture, all quite nice. I envied something much simpler: the absence of constant financial fear. And one more thing: as I insisted on paying for my own coffee, I learned that there is no tipping expected in Denmark. What a way to live.
Copyright © 2024. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Medical Records: Worse Than You Thought
I wrote earlier about post-9/11 changes in medical privacy laws that require your doctor to hand over your medical information to the U.S. government as needed for intelligence and national security reasons. S/he is not required to ask for your authorization nor even tell you the information was given to the NSA or others. That seemed scary enough.
However, I heard from a health insurance insider, who says the situation is actually much worse:
All insurance claims, including date, service, meds, units, all meta data, who you saw and why automatically goes to the government. This has been going on since 2003.
Assume it all automatically goes into the MSA (M=N) database and to every law enforcement fusion (z=s) center. Assume it is linked to your drivers license file.
Let me assure you that a “national ID” has nothing to do with a card, chip, barcode, magnetic strip, etc. It is all about the data on file and how it is linked together. The card, chip, barcode, RFID, whatever, is merely how the data is expressed.
That’s it. Can’t confirm any of it, so decide for yourself. Sleep well, America.
Copyright © 2024. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
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