Contrary to popular belief, the United States actually spends just as much on social programs (pensions, health care, education, etc.) as just about any other country in the world. The key difference between the United States and other wealthy democracies is where the money comes from. Specifically, in the United States, many people pay for social services straight out of their pockets, rather than having the public sector (aka, the government) provide the services.
From the OEC, here are 2005 figures on social spending, by country, broken out by private and public sources:
The United States actually spends an above average amount of its GDP on social programs. The difference between the United States and other wealthy democracies is not the total amount of spending on social programs, but that we place an abnormal burden--over 35%--for such spending on private consumers.
This difference developed entirely over the past forty years. In 1960, the United States was equal to other wealthy democracies in terms of overall social spending from the public sector. During the 1960's, we continued to increase our nationa level of public sector spending through programs like Medicare and Medicaid. However, since that time, while other wealthy democracies experienced a vast increase in public sector social spending, the United States has experienced little change (PDF, page 4). What has changed in the United States is a vast increase in private spending on social programs. In 1980, the 4.4% of the United States GDP was private expenditure on things like health care and education, but by 2005 that number had increased to 9.4% (source: OECD). While other wealthy democracies increased their public sector spending on social programs, the United States increased its private sector spending on social programs.
As I explain in the extended entry, this really is the grand arc of American politics over the past forty years. A public health care option would be the first major deviation from that arc in a long time.
It is not a coincidence that United States public sector social spending stalled at around the same time that the modern conservative coalition came together under Richard Nixon in 1968 and 1972 (we are still living under this coalition even now, but forty years of demographic changes have made the Nixon coalition a national minority). While we wanted more social services, we eschewed increasing our public sector social spending over the last 30-35 years because we didn't want that social spending to go to everyone. More specifically, the majority of the country wanted more social services, but the white majority didn't want to pay for social services for racial and ethnic minorities. As such, we continued to increase social spending, but we did so in the private sector, where people had to pay on their own, rather than in the public sector, where people collectively paid for each other.
The result of this has been a much higher level of inequality in America compared to other wealthy nations. Higher inequality--not lower amounts of social services--is the primary, overriding socioeconomic difference between America and other wealthy democracies (I will detail that in a later post). This inequality was caused by shifting our social spending toward the private sector, which was itself caused by a desire not to pay for social services for racial and ethnic minorities. That is the grand arc of American politics, relative to other wealthy democracies, over the last forty years.
A public health care option is the first major step required to redress this inequality. There is no such thing as health care reform without a public option. Lacking a public option, our health care system will continue on its current path of skyrocketing costs and inequality of access. We already have as much health care as other wealthy democracies--ours just costs to damn much and access to it is distributed unequally. Any health care reform without a public option should be actively opposed.
The grand arc of American politics over the last forty years is about inequality. Changing that arc requires a public health care option that is available to all Americans. Anything less does change the arc at all. We have to stop increasing private social spending a as a percentage of GDP.
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