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In the United States, the global stock market rout has wiped out trillions of dollars in retirement savings and rising unemployment is leaving more people without health insurance. In response, officials of the new administration of President Barack Obama have been busy studying the Swedish bank bailout of the 1990s and the Swiss and Dutch health care systems and have been quietly contemplating whether Europe's high fuel taxes and carbon trading system are the right way to limit the burning of fossil fuels that contributes to global warming.
In China, where the demise of the American consumer has exposed the perils of excessive savings at home, the government has not only recently proffered a big Keynesian-style stimulus program but has also just announced a three-year plan to provide universal health care. Though modest by comparison, China's health care plan goes in the direction of what has long been considered a fundamental right in Europe.
"When the world's biggest economy and the world's biggest emerging economy look for lessons in the same place at the same time, you know something is up," said Kenneth Rogoff, a professor at Harvard University and former chief economist of the International Monetary Fund, who is one of the 2,500 participants in Davos this year. "We are seeing a paradigm shift towards a more European, a more social state."
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On paper, the euro zone may look worse than both. Parts of its financial system are reeling, too, and economic growth is expected to fall for much of 2009, while many economists expect the United States to resume growth in the second half of the year. Growth in China is only slowing, not going into reverse.
But unlike the other two, Europe faces less fundamental questioning of its social contract. Higher benefits and broad-based consumption taxes serve as automatic stabilizers of the business cycle, restraining growth in good times but cushioning the downturns.
"Europe faces a plain vanilla recession," said Rogoff of Harvard. "It's a deep recession and it's coming with a vengeance. But it's not a paradigm destruction."
In China, where the demise of the American consumer has exposed the perils of excessive savings at home, the government has not only recently proffered a big Keynesian-style stimulus program but has also just announced a three-year plan to provide universal health care. Though modest by comparison, China's health care plan goes in the direction of what has long been considered a fundamental right in Europe.
"When the world's biggest economy and the world's biggest emerging economy look for lessons in the same place at the same time, you know something is up," said Kenneth Rogoff, a professor at Harvard University and former chief economist of the International Monetary Fund, who is one of the 2,500 participants in Davos this year. "We are seeing a paradigm shift towards a more European, a more social state."
.
On paper, the euro zone may look worse than both. Parts of its financial system are reeling, too, and economic growth is expected to fall for much of 2009, while many economists expect the United States to resume growth in the second half of the year. Growth in China is only slowing, not going into reverse.
But unlike the other two, Europe faces less fundamental questioning of its social contract. Higher benefits and broad-based consumption taxes serve as automatic stabilizers of the business cycle, restraining growth in good times but cushioning the downturns.
"Europe faces a plain vanilla recession," said Rogoff of Harvard. "It's a deep recession and it's coming with a vengeance. But it's not a paradigm destruction."
... but the real problem with big US gov is that it is really inefficient one, it's like UK, so in that sense smaller it is - the better for everyone... they need to study the French and even better Swedes to learn the art of how to best manage "The bureaucracy is expanding to meet the needs of the expanding bureaucracy" 
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