Should America emulate Europe?

Far left liberals like House leader Nancy Pelosi want America to emulate the European model – characterized by a large government sector, high taxes, income redistribution from the wealthiest to the poorest, universal government-supported health care and welfare, and stringent regulation. They would really like a government universal health care plan. They certainly want to preserve and even expand Social Security, Medicare and Medicaid (even though these will bankrupt the government in their current form), and they would dearly love to soak the rich and the successful for as much as they can, and feed that money to the poorer elements of our society.

This, they argue, would be better for America than the free-market, lightly regulated, (relatively) small government model advocated by conservatives, and which America has been following (more or less, but less and less as time goes by) for the past few decades.

Unlike many Utopian suggestions, this is one for which we have some real data – the performance of Europe itself over the past few decades.

• Economically, how has the European model fared? Over the past four decades Europe's core economies--the E.U. 15--have lagged behind the U.S. in terms of both gross domestic product and job growth. Overall, the E.U. 15's share of the global GDP has declined to 26% from 35% while the U.S. has held on to its share, now roughly equal to that of its European counterparts. Europe’s lost GDP has of course shifted to East and South Asia.

• In terms of government debt, how has Europe fared? The US public debt, already frightening enough, now stands at about 40% of GDP, though the proposed Obama budget will shortly push it much higher. In 2008 the combined European Union public debt stood at 61.5% of GDP.

• In terms of government expenditures, how does Europe look? The US federal government expenditures now stand at about 20% of GDP. In 2008 the EU combined public (government) expenditures amounted to 46.8% of GDP, or almost half of the economy.

• In terms of unemployment, how does Europe look? Before this recession started, US unemployment varied between 4% and 6%. EU unemployment, before the recession started, was generally 2% to 4% higher.

• In terms of productivity, how does Europe look? Average gross domestic product (GDP) in the US is about 40% higher than average GDP of the EU-15 when measured at purchasing power parity (PPP).

There is nothing in these numbers that suggests to me that emulating the European model would make America better. In fact, looking at the most serious problems we now face in the country – a massive public debt, a Social Security and Medicare system that will shortly bankrupt the government and a government that can’t keep it’s spending in line with its revenues, these all seem to me to have arisen from policies that emulate Europe.