It’s not just cranky conservatives saying that the “stimulus” bill now in the U.S. Senate would move America significantly in the direction of a European-style welfare state. European leaders are saying so, gleefully. At Davos, the European Commission President, Jose Manuel Barroso, said that Obama and the Democratic Congress were “moving toward a European-style model.” In a Wall Street Journal piece, other observers say similar things and advance the proposition that the EU is outperforming the U.S. in economic growth, showing the superiority of social democracy to America’s more market-based policy mix.

This is a misleading and dangerous argument, deserving careful analysis and forceful refutation. I’m sure free-marketeers are already on the case, but here are a few points to start with.

First, Keynesianism was originally based on talk of “aggregates” that eshewed specifics and evaded distinctions. The neo-Keynesianism in Washington now has the same defect. In the case of international economic comparisons, aggregate comparisons between the U.S. and the EU can lead to faulty conclusions by ignoring country-by-country comparisons and glossing over the details of economic policies.

The Cato Institute’s Dan Mitchell, for example, published a paper a little over a year ago that delved deeply into the question of whether the Nordic model deserved emulation. He pointed out that while Scandinavian nations had larger welfare states, they compared favorably to the U.S. in other variables of economic freedom, including tax policy:

The Nordic nations offer valuable lessons for policymakers, but they do not fit the traditional stereotype. Conservative critics correctly condemn the large welfare states, but often overlook the positive results generated by laissez-faire policies in other areas. Liberals, meanwhile, exaggerate the economic performance of Nordic nations in an effort to justify welfare-state policies, while failing to acknowledge the role of free-market policies in other areas.

More generally, research conducted as part of the Heritage Foundation’s latest Index of Economic Freedom shows conclusively that countries grow faster as they adopt freer economies. Those with improvements of at least 5 points in the index posted GDP growth rates averaging 4 percent a year from 1996 to 2006, vs. 1.7 percent for countries losing ground in economic freedom and about 2 percent for countries experiencing little or no change in the index. Government size, tax rates, and financial regulations are all components of the index.

And when you break Europe out by country, you can see that recent GDP increases have been far greater in liberalizing countries in the former Soviet bloc than in France, Germany, or Italy, where growth has been modest to anemic. It’s also way premature to assume that America’s experience in and recovery from the current recession will be worse than in the European welfare states.