The U.S. is wealthier, more dynamic, and less taxed than Europe. And no, the health care isn’t as appealing as you think.
The U.S. is wealthier, more dynamic, and less taxed than Europe. And no, the health care isn’t as appealing as you think.
T he hunger to turn the U.S. into a social democracy like those of Western Europe so preoccupies today’s Democratic Party that even a supposedly moderate pre–Baby Boom president has fully embraced the goal by pushing the Build Back Better Act, which might as well be known as the Make America Europe Act.
The bill comes from a place of deep dissatisfaction with American approaches to policy questions. Polling suggests that only 5 percent of young Democrats think the U.S. is the best country on earth, and only another 40 percent will even concede that ours is one of the best. The grass is greener on the other side of the Atlantic.
But a rigorous examination of the differences between the U.S. and Europe makes it obvious that the U.S. is superior in nearly every way, and the areas where Europe is commonly said to have the edge depend heavily on fudged statistics, as my colleague David Harsanyi notes in his powerful and argument-settling book, Eurotrash: Why America Must Reject the Failed Ideas of a Dying Continent.
That Europe (with the notable exception of France, which wisely converted most of its grid to nuclear power decades ago and is largely energy independent) has managed to make itself a virtual economic hostage of Vladimir Putin ought to alarm even the most superficial observer of the continent, but Harsanyi illuminates many other counterproductive European conventions that are either dismissed by, or simply unknown to, the American Left.
Moreover, Europhiles would be shocked by many European policies if they bothered to learn about them. Their beau ideal, Denmark, which famously has a very generous welfare state, has also become far more hostile to outsiders than the relatively welcoming U.S. and now has “one of the harshest refugee policies in the world.” American Europhiles would not, I think, accept the extremely tight immigration policy that even Denmark’s left-wing party supports in exchange for Danish levels of social spending. Denmark’s prime minister is a young Social Democrat woman who has said she wants to reduce the number of asylum seekers to zero.
American Europhiles are equally unaware of the price tag of social democracy: If the U.S had Denmark’s fiscal policy, Harsanyi writes, everyone who makes more than $65,000 a year would hit the maximum 55.9 percent income-tax rate. Scandinavians also pay a 25 percent value-added tax on most goods. Merely telling Americans about the Eurotax-inflated price of fuel — gasoline is around eight bucks a gallon in Western Europe, and closer to nine in Denmark and Germany — would probably make most of them blanch. Even before the Ukraine crisis, Europeans paid double what Americans pay for electricity.
Ah, but health care is free, right? Harsanyi goes into great detail in a chapter that debunks the notion that European health care is the reason for the longer life span on the continent (about five years on average). American lifespans are shortened not by inferior health care but by higher rates of obesity, homicide, and lethal automobile accidents. (Americans drive much more than Europeans.) Our nominally higher infant-mortality rate is misleading also: Europeans simply don’t count tiny premature babies who face long odds of survival as live births, so they don’t count against infant-mortality statistics.
As for the vaunted National Health Service in the U.K., the very model of what Europhiles would like to implement here, Harsanyi lays out how it wouldn’t work in the U.S. Britons are simply used to being told to wait long periods for routine procedures. The British people’s willingness — indeed, eagerness — to wait in queues is charming, but cancer is impatient. The NHS’s own data show that 25 percent of cancer patients did not start their treatment “on time” — which it defines as within 62 days of referral. Nor is the quality of care acceptable: Some 97 percent of prostate-cancer patients in the U.S. survive at least five years; in the U.K. that figure is 83 percent. Breast cancer? The five-year survival rate is 89 percent here, 81 percent there.
Americans wouldn’t put up with the established routines of the NHS. Patients in its hospitals are four times as likely to die as patients in U.S. hospitals. Among the sickest patients in U.K. hospitals, that figure is an astonishing seven times as likely to die. When you flip things around and look at how medical professionals are treated and compensated, we wouldn’t stand for that either. Starting pay for British nurses is one-third what their American counterparts make.
The sclerotic, regulation-happy, protectionist European Union is a top-down bureaucracy that by design has little accountability to the democratic process, which is why it amounts to an elaborate scheme to punish the middle class. Europeans spend 13.5 percent of their income on food, compared with the 9.5 percent spent by Americans. The two-tiered economy in Europe protects older workers with cushy job security and high pay while it locks out younger, dynamic workers and striving immigrants. Just before the coronavirus hit, French youth unemployment stood at 19.6 percent while it was 3.7 percent in the U.S.
A culture of risk aversion hampers wealth creation; the reason you hardly ever hear about a game-changing new European startup is that they hardly exist. Spotify is the only European company among the top 30 Internet-based firms in the world. (America boasts 18.) European standards for stock options and taxes are why a CEO in Germany said that “he can’t provide his people with a stake in the future of their venture without crushing costs and hassle,” Harsanyi reports. Stories of overcoming initial failure are part of the mythology of Silicon Valley and U.S. entrepreneurship in general; in Europe, “failure is regarded as a personal tragedy.” There simply is no Elon Musk of Europe. And no, most American plutocrats are not members of the lucky DNA club. Two-thirds of the wealthiest Americans are self-made, and only a third of those Americans with assets over $5 million grew up rich. Half of the wealth in the Forbes 400 was created in just one generation, according to an analysis published in the Cato Journal.
The-much discussed shrinking of the middle class that allegedly tells us we need to shackle ourselves to low-growth European policies actually tells us just the opposite: Our middle class is shrinking because our upper class is expanding to a level that is the envy of the world. From 1967 to 2015, the number of U.S. households earning $100,000 (in inflation-adjusted dollars) has tripled. And despite massive inflows of lower-income immigrants over that period, the percentage of U.S households with income under $35,000 declined by five points over the same period.
The consumption of America’s lower class would be middle-class by European standards, and the tax burden plays a big role here too. The American tax code is much more progressive than Western Europe’s. A European making $37,000 a year pays, on average, a 50 percent marginal tax rate on income over that. French workers have to work, on average, three and a half months longer than American ones do to pay their tax. Some 30 percent of Europeans report having no savings whatsoever, as against 16 percent of Americans.
Pocketbook and health-care issues tell only a part of the story about why American life is vastly superior to Europe’s. That two-week Eurail pass may leave a lot of American tourists convinced that European culture is preferable, but Harsanyi dismantles that notion as well, as I’ll explain in my next column.