As Europe rejects welfare state, United States turns to it

The Obama administration has been racing to transform the United States into a copy of the European social-welfare system, while at the same time those countries are being forced to come to grips with the failure of their welfare states, says Michael D. Tanner, a senior fellow at the Cato Institute.

The United States is well down the road toward a European level of government spending and debt. Already, the U.S. national debt tops $72,000 per household. The Congressional Budget Office projects the debt will equal 90 per cent of US gross domestic product (GDP) by 2020. That would be higher than any of the countries mentioned below.


The poster-child for euro-socialism is facing a national debt of $1.9 trillion, about 77 per cent of its GDP; that does not count the unfunded liabilities of the country's state pension system, which may exceed 200 per cent of GDP alone.

Fiscal facts have forced the French government to finally propose an increase in the retirement age.

The government is also selling off government-owned land and other property. And the French health care system has gradually been increasing copayments and other forms of consumer cost sharing.


Every working person in Germany shoulders about $53,000 in debt; in response, the German government has announced plans to cut more than $98 billion in government spending, nearly 3 per cent of GDP, over the next four years.

It has already announced $3.7 billion in cuts in this year's budget, including a reduction in unemployment benefits.

The retirement age will be raised from 65-years-old to 67-years-old by 2029, and government universities, previously free, have begun charging tuition.

Great Britain:

England's national debt is a staggering $133,000 per household; the new government of Conservative Prime Minister David Cameron has already announced more than $9 billion in budget cuts.

It plans to raise the retirement age under its social security system and abolish payments to parents of newborn children.

The government also aims to implement U.S.-style welfare reform, including a work requirement for those receiving benefits.

Source: Michael D. Tanner, As Europe laments welfare state, U.S. turns to it, USA Today, June 26, 2010.

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First published by the National Center for Policy Analysis, United States

FMF Policy Bulletin/ 06 July 2010
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