February 24, 2012
David Brooks tells readers that, if we count tax expenditures, the United States has a larger welfare state than many European countries, including Denmark, the Netherlands, and Finland. This is true, but it is important to understand what is being measured.
Brooks is looking at what we pay for social welfare expenditures, not what we get. This can be very different, as is most obviously the case with health care. As a share of its GDP, if we add in tax expenditures (e.g. the deduction for employer provided health insurance), the government in the United States commits a larger share of GDP for health care than almost anyone. (If we count government granted patent monopolies on prescription drugs and medical equipment, add in another percentage point of GDP.) Yet, unlike the European welfare states, the United States is still far from providing universal health insurance coverage.
In health care and other areas the United States is clearly paying for a welfare state. It is debatable whether it is getting one.
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