European “Socialism” — Safety Net or Nanny State?

This article profiles a family near Heidelberg, Germany, and how they’re coping with both spouses being out of work. Archie Bunker types will blubber about “the welfare state!” and “worthless parasites!” But this family — a husband and wife and their four children — is surviving a lot better than their unemployed counterparts in the U.S.

Sarah Fuerstenberger is from Detroit originally and has lived in Germany most of her adult life. She says: “If we were in Detroit, we could worry every minute. But here, we’re safe because of the system. The German government is really good about taking care of people; we know we won’t be starving one way or another.”

According to the article, this is exactly why European leaders denied Obama's request last month for them to increase their own economic stimulus programs. Their reasoning is that their existing safety net is already keeping people afloat AND stimulating demand.

In other words, if unemployed people aren’t forced to choose whether they want to eat, pay the rent OR take their sick child to the doctor — they can actually go out and buy things, thereby stimulating the economy and keeping businesses from going under.

In addition to socialized medicine and generous unemployment benefits, a lot of German workers are helped by the practice of kurzarbeit — reduced working hours but without a reduction in pay. Whatever amount of money the company loses through this practice, is reimbursed by the government. This policy has allowed some of Germany’s largest manufacturers to reduce production because of decreased demand, without having to do mass layoffs. An economic adviser at the German Institute for Economic Research said: “Nobody is against it — not the trade unions, not the workers' councils, no political party. All are happy.”

And no, this safety net isn’t cheap. The average German worker pays about 52% of his/her income for taxes and social security. For the average American worker, that figure is about 30%. Is it worth the higher cost?

Sarah Fuerstenberger says: “Sometimes I think it’s not worth it when I look at what ends up in my bank account, but in times like these, I appreciate it.”

cross-posted at Bring It On!