But its all social spending, surely. Seems misleading to claim that the US is spending less (WS claims 50% less) than other places on social spending than other developed countries based on a statistical trick of ignoring most of the US spending because it is accounted for differently. Especially since we know that the US health care system, for instance, costs a lot more to run. It seems safe to assume that someone somehow is paying for that, so in fact the US must be spending a lot more, not a lot less.
The outcomes might be a lot less fair and ordinary people might suffer a lot more insecurity in the US, but it seems to me that the "level of social spending" is not necessarily relevant to this. As with capitalism in general, its not the resources put in, its how they are distributed, that is relevant to the level of economic terrorism suffered by the working class.
[WS:] There is no trick in it at all - see my previous posting about mandatory private spending that is counted as 'public' in the statistics I quoted. The private - public is really a semantic distinction and it merely denotes what kind of tax mechanism is being used to finance social programs. You need to give more credit to government statisticians. Unlike economists, they are smart people and look beyond labels.
However, I concur with your larger point that social spending per se, even as a percent of the GDP, is not necessarily a good indicator of social security/insecurity. It is the institutional arrangements that make all the difference. For example, the US spends more on health than most other nations, but most of it goes into transaction costs i.e. covering expenses and profits of bloated private bureaucracies, fabulous executive salaries, expensive but medically unnecessary facilities and procedures and so on.
However, if the expenditures are mandatory - which again includes both public and private outlays - this provides more social security than discretional spending (private or public). A good case in point is comparing x-socialist countries to the US. The level of actual spending per capita or as % of GDP in x-socialist countries was much lower than that in the US - yet the former had a higher level of both, actual and perceived, social security than the US. The difference lies in the institutional arrangements. In x-socialist countries, these expenses took mainly the form of subsidies on the production of public goods, whereas in the US it takes mainly the form of subsidies on private consumption (that may or may not include consumption of public goods).
The chief difference between the two is that the latter has a much higher transaction costs - referral services, insurance companies, intermediaries of all sorts, collection agencies, cost of servicing the uninsured, litigation and what not. These costs are, to a large extent eliminated when the government controls, either directly or though subsidies, the supply side. This is really a s standard argument made by Transaction Cost Economics (TCE), and anyone interested in this topic should perhaps familiarize him- or herself with this literature.
Wojtek