Contrary to deeply held American political beliefs, large budgets for public programs are not a drag on healthy democratic economies, says economic historian Peter Lindert of the University of California, Davis.

"The tale you hear told by economists and the press is that a large government sector for pensions, welfare, etc., will crush us," Lindert said. "If that were true, Europe would have died a long time ago -- but the welfare state survives quite fine, thank you."

Lindert's new book, "Growing Public: Social Spending and Economic Growth Since the Eighteenth Century," spells out the impacts of big social safety nets on the world's richest democracies and is receiving attention from the international media.

Even though the United States is at the low end of the spending spectrum among these countries, Lindert said it has the world's best public higher education system and is also doing well with public pensions, K-12 public education and welfare.

The trick to affording safety nets for children, the poor, the sick and the elderly, is the method that countries use to raise money to pay for them.

"America is divided right and left by these very issues -- the role of government in our lives and who gets taxed to pay for programs," Lindert said.

The countries considered the closest to the British Lord Beveridge's classic "welfare state" -- the Scandinavian countries, Belgium, Austria and the Netherlands -- are not taxing the rich to pay for the public-sector programs.

"They don't soak the rich. They soak the middle class and workers who wanted the safety nets in the first place," Lindert said. "It is a conservative economist's dream tax system. The public pays for it with consumption and 'sin' taxes on alcohol, tobacco and gasoline."

At the same time, statistics show that the economies of these European countries remain strong with growing gross domestic product.

Lindert, who spent more than a decade sifting through data to compare and contrast the public-sector spending in budgets of 21 countries over 200 years, believes that the United States is not likely to adopt a strategy to increase the consumption taxes on the middle and working classes.

"We probably will never change because the American conservative ideology is so strongly rooted in our history. It's about individualism in an ethnically diverse society where people won't vote to support 'them.'"

Historically, only during the Great Depression, when many in the middle class became impoverished, did large groups of voting Americans support a universal system for public assistance -- the Social Security Act, covering workers in commerce and industry, which was signed by President Roosevelt in 1935.

In contrast to the U.S. population, Europeans are older and more homogenous. Those two things make them willing to spend money on social programs whereas we Americans are younger and inclined to believe that everybody can make it on their own, Lindert said.

Among the 21 countries analyzed, the United States, Switzerland, Japan, Canada and Australia have the lowest budgets for these publicly funded safety-net programs.

In his comparison of how the United States has performed vs. the other 20 countries in delivering five major public programs, Lindert said that the United States pays the least for publicly funded programs, with the exception of education.

Lindert said those policies have had the following consequences:

• Public health: "That we don't have a good public health system with adequate insurance is clearly our biggest failure," Lindert said. It has lowered the life expectancy for Americans vs. those in countries with better public health systems, such as Great Britain, France, Canada, Italy and Sweden. "We will go on making little changes but having an inferior system because the sheer complexity of public health and our national philosophy will prevent a comprehensive solution," Lindert said.
• Higher education: Lindert says the United States is heads and shoulders above any other country in the quality of its public colleges and universities. He attributes the success to a competition between public and private universities for students and faculty, and high accountability to the students and parents.
• K-12 education: Although American students don't test as well as other countries, Lindert believes that the public education system is overall in good shape. "We know of our flaws but American students stay in school longer than others, and our higher education system is the best in the world." Lindert believes more competition for K-12 school choice, similar to that which exists in higher education, would improve the system.
• Public pensions: Lindert believes with a few "gentle tweaks" in the Social Security system, the United States will be able to maintain a healthy pension system into the future. Those tweaks include slightly decreasing the annual cost-of-living increases while gradually increasing the working age to 69 for an aging population that is among the healthiest in the history of the world. "We're not aging all that fast, for all that we fret about the issue, because we have many younger immigrants and they are partly paying for our benefits," Lindert says. "In this respect we are unlike Italy and Japan with their much older populations."
• Welfare: Until recently, the United States had a badly run welfare system, Lindert said, pointing out, "Before 1993, the minute a poor single mother got a job, she would lose most of her benefits." Bipartisan reforms have turned the system around, first with the carrot of tax breaks for low-income families in 1993 followed by the "tough-love" strategy of putting term limits on welfare in 1996.