The Euro Collapse And The Welfare State

Yglesias compares a Robert Samuelson quote blaming the Euro crisis on the welfare state with actual facts:

Ezra Klein tackles this theory by noting that more statist health care systems seem to be more economically supportable. But fortunately, the "welfare state" versus "currency crisis" interpretations of the crisis are helpfully distinguishable thanks to the fact that Sweden and Denmark aren't on the Euro and have the most expensive welfare states in the world. Ireland and Spain, by contrast, have relatively stingy welfare states. But the sovereign debt crisis exists where the Euro exists rather than where generous welfare states exist. Now it is true that if Europe totally implodes that will be a crisis for the welfare state, since the welfare state is at its largest extent in Europe, so a European crisis will imperil the model. But a crisis of the welfare state should strike Sweden most severely.

This is an interesting battle which will be played out here.  Republicans are completely vested in the argument that tax increases are impossible and social safety net cuts must be made.  I think they are using smoke and mirrors to make that case, and really it is their tax cuts which are unsustainable.  They lead to income inequality and the erosion of the middle-class, making more people eligible for safety net programs and the burden on the budget greater.  Somehow, they've convinced many struggling folks that government, and in no way business, is responsible for all of their problems.  They are making an extremely risky bet that people won't wise up.