I’ll leave others to probe those characterizations. What I want to point out is how little difference there is between the American and European welfare states.

Table 1 compares expenditures by function as a proportion of total government expenditures (all level of governments) for 10 Eurozone countries (Austria, Belgium, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain—call them collectively the Euro10) and the United States in the year just before the Great Recession. The other seven Eurozone countries are excluded because, in most cases (like Greece), no data are available. The numbers are surprising.

It is true that, if one looks only at social protection expenditures—disability and old-age pensions, welfare, unemployment insurance, housing assistance, and such income support programs—the Euro10 spend twice as much of their budgets (40 percent) as American governments (all levels) do (19 percent). However, money income support is just one of the functions of the welfare state. Another major function is health care and, on this one, American governments spend 50 percent more of their budgets (mainly on Medicare and Medicaid) than the Euro10—21 percent versus 14 percent.

Public expenditures in education can also be considered a function of the welfare state. More of government budgets go to this function in the United States (17 percent) than in the Euro10 countries (11 percent).

Adding up all these welfare state functions—social protection, health, and education—we obtain total expenditures (line 11 of the table) of 65 percent of government budgets for the Euro10 vs. 57 percent for the United States—a pretty small gap.

The gap is further reduced when we take the unweighted average of the Euro10 countries. This approach reduces the influence of large countries like France and Germany, which have higher government expenditures, weigh more in the total, and may misrepresent the typical European country. We can then calculate that our typical European state spends 63 percent of its budget on welfare-state functions. Thus, only a 6 percentage point difference (63 percent vs. 57 percent) separates the proportion of government money spent on welfare state functions in the typical European country and the United States; or, may we say, the European welfare state is only 10 percent larger in Europe than in America. There is even one European state where welfare state expenditures are lower than in the United States: the ratio is 52 percent in Portugal.

These results call for a few caveats. Since the total expenditures of the average Euro10 state correspond to a higher proportion of gross domestic product than do government expenditures in the United States, the gap gets amplified in Europe when welfare state expenditures are directly compared to GDP. It can be calculated that (in 2007), welfare state expenditures as defined above were 30 percent of GDP in the Euro10 countries compared to 21 percent in the United States. The 10 percent gap calculated previously is thus amplified to a 43 percent difference. Moreover, the political culture remains less welfare-statist in the United States than in Europe. The American welfare state is far from obliterated, but one could say that the glass is half full.

Growth of the beast | All this is not surprising given the tremendous growth of the American welfare state since the Great Depression.

We can get a glimpse at this growth by considering the evolution of social benefits to persons, shown in Figure 1. These U.S. Bureau of Economic Analysis data mainly comprise government expenditures on Social Security, Medicare, Medicaid, and unemployment benefits; they do not include education and, in general, have a smaller coverage than the Organisation for Economic Co-operation and Development’s comparative data. The advantage of the BEA data on social benefits is that they go back to 1929, much earlier than the other statistical series available. Figure 1 gives the ratio of these expenditures both to GDP (bottom curve) and to total government expenditures (top curve). The two measures generally move together.

From 1929 (the year the Great Depression began) to 1933 (the trough of the Depression), the share of social benefits to persons tripled. Both a GDP drop and an increase in the actual amounts of social benefits explain this evolution. But the amount of social benefits in dollars (not shown on the chart) increased by more than 40 percent, which corresponds to an even steeper increase in constant dollars as prices dropped during the Depression. From this viewpoint, the American welfare state was born under Herbert Hoover’s administration, and then came of age under Franklin Roosevelt’s, when social benefits expenditures doubled over a few years. By 1936, they had reached 3.2 percent of GDP, four times what they were in 1929.

Toward the end of World War II, social benefits to persons jumped again because of veterans benefits. With ups and downs due mainly to the business cycle, the ratio remained more or less constant until the mid-1960s. By that time, veterans benefits had started easing, but the Social Security system, created in 1935, had begun to ramp up.

Figure 1 clearly shows the third era of growth in social benefits, from the mid-1960s to the mid-1970s, when the ratio of these benefits to GDP doubled again. From 1965 to 1975, social benefits paid by government to individuals in the United States climbed from 4.7 percent of GDP to 10 percent.

The American welfare state grew more slowly between the mid-1970s and the onset of the 2007–2009 Great Recession. The ratio of social benefits to GDP was still on an upward trend, though, and reached 12 percent in 2007. Since GDP grew briskly over most of that period, the slow upward creep can be seen better in the ratio of social benefits to total government expenditures, which increased from 33 percent to 38 percent between 1975 and 2007.

The Great Recession was another growth period for the American welfare state. In 2010, social benefits paid to individuals amounted to more than 15 percent of GDP. On each dollar produced and earned in the economy, the American welfare state took 15 cents in taxes and redistributed that money in direct support to some individuals.

More generally, differences between Europe and the United States are often exaggerated, as demonstrated by Peter Baldwin in his 2009 book, The Narcissism of Minor Differences: How America and Europe Are Alike, an Essay in Numbers (Oxford: Oxford University Press). For example, the richest 10 percent of taxpayers pay a higher proportion of income taxes in the United States than in all major European countries, and these taxes are more progressive in America than in most of these countries.

I have shown how the welfare states are similar on the two sides of the Atlantic. Similarities often become more striking if, instead of comparing the whole diversified United States with Europe, we compare individual American states with European countries. For example, minimum wages (calculated in dollars corrected with Purchasing Power Parities) in Washington, Oregon, Connecticut, and Vermont are higher than in all major European countries; Maine is not far behind France. Again, however, the glass is half full, as the welfare state still faces more political challenge in America than in Europe.