Via Ezra, Krugman, and Bradford Plumer there are some interesting numbers showing that the private welfare state (i.e. pensions, health benefits, etc provided by corporations) in the US added to the public welfare state which exists here but is more extensive in Europe, is roughly the same size as its counterparts in Europe. Krugman’s point, which I’ve reflected many times, is that if you let the corporate welfare system fall apart (i.e. replace GM as largest employer with Wal-Mart) then you are going to have a collapse in the coverage of welfare which will be to the wide detriment of society, particularly to the middle-classes. The fall in employer-based health insurance is the most obvious example of this collapse, and it will continue to get worse until there’s a political solution some years down the road. (Although in Joe Paduda’s view the time-table for this solution is moving up).
What I’ve been saying for years is that whether you call them “premiums” or “taxes”, society (i.e. people) still needs to pay for the underlying expenses, and when your underlying expenses are up to two times greater than those of other countries, you will have to pay more for them. So, there is a cost for having health care at 15% of GDP, and we are going to have to pay it somehow. And that’s one reason why other countries make serious efforts to contain those costs, with all the unpleasant consequences that may entail, as I discussed yesterday.