Germany's good timing

Erza Klein discusses Germany's decision, ten years ago, to reform social security. In doing so, he writes, the country managed to escape the financial crisis relatively unscathed, without having to make painful fiscal cutbacks. But, as he duly illustrates, most Americans wouldn't consider the state of Germany's welfare system particularly austere:

To live in Germany, even at a time when the state’s belt is tightly cinched, is to live in a country where health care is guaranteed, where unemployment benefits will replace more than two-thirds of your income for the first year and 59 percent of your income in year five, where parents get 14 months of guaranteed leave at two-thirds pay, where the state will pay your employer not to fire you, and where you’re assured 20 days of paid vacation. By our standards, the social-welfare system is absurdly generous, not admirably spare.

In order to fund all that, taxes are almost 40 percent of GDP in Germany — as compared to about 28 percent of GDP in America — and the decision to raise taxes that high is certainly something Americans would recognize as a tough choice. But that’s really the major decision Germany made to secure its welfare state.