Would Americans Be Happier If U.S. Were More Like Denmark?

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would Americans be happier if the U.S. were more like Denmark
Jochen A. Krause/APLegos are one of Denmark's happiest creations.
As income taxes arrive from around the country, Congress is debating how to spend the loot.

Earlier this month, the Obama administration submitted to Congress its proposed fiscal 2015 budget -- a Santa Claus wish list of facts and figures $3.9 trillion tall and stretching to 218 pages. The numbers in this draft will certainly be subject to tweaking by Congress. Whatever emerges at the end, one thing is certain: No one's going to be entirely happy with the result.

Wouldn't it be nice if we could all agree on a budget that did make everyone happy? Take the folks in Denmark. According to the 2013 "World Happiness Report," published by the Sustainable Development Solutions Network under the auspices of the United Nations, Denmark ranks as the "happiest" country on Earth.

Factors going into the creation of a happiness score include real GDP per capita, health, life expectancy, social support networks, personal freedom, lack of corruption in government and generosity. After 156 pages of crunching such numbers, Denmark got a 7.7 rating (out of 10 points possible). America scores a 7.1 and ranks 17th. The least happy place is the West African nation of Togo, which scores a 2.9.

What makes Danes so happy? And how might we imitate them? Working largely from data from the CIA World Factbook, here are a few ideas.

Make Do With Less

Denmark's a small country, with an even smaller economy. Per capita gross domestic product in Demark, adjusted to reflect purchasing power relative to America's economy, is $37,800 -- vs. $52,800 in the U.S. Yet somehow, Danes live quite happily on incomes just 70 percent of the American average -- or even less than that.

Pay More Taxes

This is the time of year when Americans love to complain about how "overtaxed" we are. But compared to Denmark, American taxes are nothing. The federal government collects about 22 percent of U.S. gross domestic product as taxes (including Social Security). Denmark, in contrast, takes nearly 56 percent of gross domestic product. This makes Denmark the eighth most-taxed nation.

Save More

Somehow, even with less money coming in the door and the tax man taking so much of it, Danes sock away more money for retirement than Americans do. Gross national saving (which includes savings by both individuals and government) in 2013 was estimated at 24.1 percent of GDP -- versus 13.5 percent in the U.S.

Spend Less

Logically, saving more -- and paying more for taxes -- implies lower levels of spending on "stuff." Danes spend about 49 percent of their GDP on "household consumption." In America's more consumption-oriented economy, household spending consumes 69 percent of GDP.

Invest More in People

Taxes provide free education for all students through university. A national health care system covering all Danish citizens. Health care spending in Denmark is about half what the U.S. spends, per person. Yet polls show that more than 90 percent of Danes are "totally satisfied" with the health care they receive. And while that's a subjective measure, the fact that life expectancy in Denmark is almost identical to that in the U.S. suggests that the quality of health care in Denmark is high.

Satisfaction Is the Key

Socrates wrote that "the secret of happiness ... is not found in seeking more, but in developing the capacity to enjoy less." This seems to be a trick the Danes have mastered. They have worked out a system for distributing what they do earn to satisfy the needs of the population.

The result -- among other advantages -- is a country with lower poverty, unemployment, inflation, budget deficits and national debt than we have here in the U.S. More than just reasons to be happy, these all sound like accomplishments Danes can be proud of.

Rich Smith is a contributing writer for The Motley Fool. ​

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