www.nytimes.com/2010/01/11/opinion/11krugman.html
PAUL KRUGMAN Published: January 10, 2010 As health care reform nears the finish line, there is much wailing and rending of garments among conservatives. Even calmer conservatives have been issuing dire warnings that Obamacare will turn America into a European-style social democracy. And everyone knows that Europe has lost all its economic dynamism.
Blog: The Conscience of a Liberal Strange to say, however, what everyone knows isn't true. But the story you hear all the time -- of a stagnant economy in which high taxes and generous social benefits have undermined incentives, stalling growth and innovation -- bears little resemblance to the surprisingly positive facts. The real lesson from Europe is actually the opposite of what conservatives claim: Europe is an economic success, and that success shows that social democracy works. Actually, Europe's economic success should be obvious even without statistics. For those Americans who have visited Paris: did it look poor and backward? You should always bear in mind that when the question is which to believe -- official economic statistics or your own lying eyes -- the eyes have it. It's true that the US economy has grown faster than that of Europe for the past generation. Since 1980 -- when our politics took a sharp turn to the right, while Europe's didn't -- America's real GDP has grown, on average, 3 percent per year. Meanwhile, the EU 15 -- the bloc of 15 countries that were members of the European Union before it was enlarged to include a number of former Communist nations -- has grown only 22 percent a year. All this really says is that we've had faster population growth. Since 1980, per capita real GDP -- which is what matters for living standards -- has risen at about the same rate in America and in the EU 15: 195 percent a year here; In the late 1990s you could argue that the revolution in information technology was passing Europe by. Broadband, in particular, is just about as widespread in Europe as it is in the United States, and it's much faster and cheaper. Here America arguably does better: European unemployment rates are usually substantially higher than the rate here, and the employed fraction of the population lower. But if your vision is of millions of prime-working-age adults sitting idle, living on the dole, think again. In 2008, 80 percent of adults aged 25 to 54 in the EU 15 were employed (and 83 percent in France). Europeans are less likely than we are to work when young or old, but is that entirely a bad thing? And Europeans are quite productive, too: they work fewer hours, but output per hour in France and Germany is close to US levels. Like the United States, it's having trouble grappling with the current financial crisis. Like the United States, Europe's big nations face serious long-run fiscal issues -- and like some individual US states, some European countries are teetering on the edge of fiscal crisis. So why do we get such a different picture from many pundits? Because according to the prevailing economic dogma in this country -- and I'm talking here about many Democrats as well as essentially all Republicans -- European-style social democracy should be an utter disaster. After all, while reports of Europe's economic demise are greatly exaggerated, reports of its high taxes and generous benefits aren't. Taxes in major European nations range from 36 to 44 percent of GDP, compared with 28 in the United States. So if there were anything to the economic assumptions that dominate US public discussion -- above all, the belief that even modestly higher taxes on the rich and benefits for the less well off would drastically undermine incentives to work, invest and innovate -- Europe would be the stagnant, decaying economy of legend. Europe is often held up as a cautionary tale, a demonstration that if you try to make the economy less brutal, to take better care of your fellow citizens when they're down on their luck, you end up killing economic progress. But what European experience actually demonstrates is the opposite: social justice and progress can go hand in hand.
Editorial: Right to Confront Witnesses Using lab reports as evidence without requiring prosecutors to call the lab analysts to testify violates the Sixth Amendment.
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