At a time when critics of Barack Obama's health-care reforms accuse the US President of attempting to impose social democracy in Washington, economist and Nobel Prize laureate Paul Krugman points out that European-style social democracy, which is often vilified by American conservatives, actually works.

As health care reform nears the finish line, there is much wailing and rending of garments among conservatives. And I’m not just talking about the tea partiers. Even calmer conservatives have been issuing dire warnings that Obamacare will turn America into a European-style social democracy. And everyone knows that Europe has lost all its economic dynamism.

Strange to say, however, what everyone knows isn’t true. Europe has its economic troubles; who doesn’t? But the story you hear all the time – of a stagnant economy in which high taxes and generous social benefits have undermined incentives, stalling growth and innovation – bears little resemblance to the surprisingly positive facts. The real lesson from Europe is actually the opposite of what conservatives claim: Europe is an economic success, and that success shows that social democracy works.

Actually, Europe’s economic success should be obvious even without statistics. For those Americans who have visited Paris: did it look poor and backward? What about Frankfurt or London? You should always bear in mind that when the question is which to believe – official economic statistics or your own lying eyes – the eyes have it.

In any case, the statistics confirm what the eyes see. Read full article in the New York Times...