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Back when the US presidential election, I frequently heard the US is not suitable for the high-tax, large-welfare system like in Scandinavia. This is especially common among leftists, mostly Hillary Clinton supporters (example):

Flam said, “We have to remember that Sweden is a small country, the population is very homogenous.”

But I didn't see anyone provide evidence for this statement.

So what is the reason big countries are considered to not be suitable for the same solutions as these 'good welfare nations'?

Also, does the "big" mean population-wise or geography-wise? The former includes countries like Japan and the latter like Australia.

  • Comments are not for extended discussion; this conversation has been moved to chat. – yannis Mar 13 '18 at 9:07

10 Answers 10

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Caveat: These are impressions of a Scandinavian dude (assuming you would include Finland) who only lived in the US (in late 80's) as a grad student/post doc, but never raised a family there.

I would say that the question is more complicated than just a matter of size. The scale may affect the viability of a welfare system financed by we the taxpayers, but not necessarily in a direct way.

  • One thing that caught my eye in the article was the statement that the Swedes, by and large, trust their government. This is mostly true in all the Nordic countries, but I'm a bit skeptical about the Americans. You guys are proud of your form of government, but when is the last time you heard an American say "the government is on your side" un-ironically?
  • Don't take the previous bullet too seriously though. Things aren't that different on this side of the pond if we scale up one level! Many people here, Scandinavia and elsewhere, have a similar mistrust of the EU and its bureaucrats. If some politician here suggested the EU to run the welfare system, the voters would call for their local equivalent of tar and feathers. I don't know whether the reason is related to the size, geographic distance or what. Ask a psychologist, I'm a math guy.
  • Healthcare is a big part of it. May be I watched too much LA Law and such (my wife was pregnant during the last months of our stay so I did get a glimpse of the US healthcare system), but I have the impression that healthcare costs in the US are driven up by: A) the medical professionals need to cover the cost of their education, B) when an insurance company picks up the bill, the medical practitioners have a tendency to take a number of extra tests to cover their ass because, C) the US courts are occasionally rather generous with their malpractice compensations. I'm not saying that consumers in Scandinavia would not be able to take malpractice cases to court, but I do find the American legal pratices ridiculous. Cut a couple of zeros from those dollar figures, please.
  • What I was getting at with the previous bullet is that you cannot isolate the healthcare system from the rest of the society, remove it with surgical precision, and replace it with another. It is connected to the legal and educational industries at least, and any changes in one component will have ramifications in the others.

Ok, so I just kept stating the obvious. Back to the actual question.

  • The size of the country per se may not be a problem. But, while a taxpayer in New York City may find it acceptable to support people upstate, a taxpayer from Deep South may be more reluctant to support New Englanders (and vice versa). I don't know for sure, but the size of the country may enter the equation this way.
  • The linked article also mentioned relative homogeneity of populations of the Scandinavian countries as a factor. This plays a role in the sense that the number of free-riders, while not equal to zero, is tolerable here. Not sure how the US taxpayers see this?
  • If the US wants to change its welfare structure, it may be better to look at UK and/or Australia for cues. At least the legal systems are then more compatible.
  • It may also be more palatable to the US taxpayers to do reforms like this at the level of states. Or, at the very least, finance it state-by-state. Within EU this is referred to as subsidiarity. Admittedly a point against bringing in a system from a small country to a much bigger one. Anyway, if implemented at the level of states, then the states could learn from experiences of each other, adapt and modify their own ways, and eventually come up with something that works.
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    Comments are not for extended discussion; this conversation has been moved to chat. – Sam I am Mar 11 '18 at 20:05
  • Malpractice adds about 3% to the cost of insurance in the USA. So it is not really a factor. truecostofhealthcare.org/malpractice – DCook Mar 12 '18 at 16:36
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    2 cents: "homogenous" I read it as "everyone earns more less equal". This means a janitor don't earns much less than a oncologist so the janitor can contribute proportionaly more to the system cash and the oncologist (and the hospital CEO) will not bill ridiculous values like in the US – jean Mar 13 '18 at 12:53
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    @jean Also, the education of the oncologist was paid by we the taxpayers, so they A) don't start their career a quarter mill in debt, B) may (or may not?) feel like they "owe" the people for the near certain chance to make quite a bit more than the average. Whatever. That's a complicated issue, and I don't want to simplify it unduly. – Jyrki Lahtonen Mar 13 '18 at 13:10
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    C) the US courts are occasionally rather generous with their malpractice compensations. I'm not saying that consumers in Scandinavia would not be able to take malpractice cases to court, but I do find the American legal pratices ridiculous. Cut a couple of zeros from those dollar figures, please. Wow, you get it. Very few get this - I'm really impressed (as an American). Legal costs are killing our medical system yet few ever bring this part up in the discussion. +1. Well said. – Ms Jackson Mar 13 '18 at 19:11
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It's not a matter of land area or even directly population, per se. The key part of the quote in the question is the homogenous part. The USA is the opposite of homogenous (and, at least for most of its history, a large percentage of the country has prided itself on that fact.)

  • The USA has a large Southern border across which millions of people from much less wealthy countries immigrate (some legally, some illegally.) Overall, around 13% of the entire U.S. population is foreign-born. The vast majority of that is from nations with much lower standards of living. Most estimates of the number of illegal immigrants alone in the U.S. exceed the entire population of Sweden, over 11 million people.

  • Even among people born in the U.S., while all incomes are denominated in U.S. dollars, average incomes and costs-of-living vary dramatically from region to region (though regional differences in actual standard of living are much smaller, since the regions with lower nominal incomes also tend to have much lower cost-of-living.) The variation is even more dramatic when non-state territories (e.g. Puerto Rico, Guam, Saipan, USVI, etc.) are considered.

This lack of economic homogeneity causes a lot of problems for attempts to implement social safety net programs that attempt to provide an overall minimum standard of living.

  • Regional variations in incomes and costs-of-living make it difficult to set which income levels should actually qualify for certain forms of government assistance. An income level that would represent poverty in one part of the country might be solidly middle-class in another part, so nationwide standards are hard to set. And this is not just state-to-state variation, but county-to-county. Places like New York City and San Francisco can having living costs 2-3 times those of areas that are only a relatively short distance away in the same state.

  • Attempting to provide a minimum standard-of-living (especially if that standard is around middle-class) when you have dramatic differences in incomes means that a relatively small percentage of the population will be supporting a relatively large one. Even as it is, around 45% of U.S. households pay net zero or negative federal income taxes. The percentage who are receiving government benefits exceeding their tax liability would be significantly higher than that. This puts a huge tax burden on a relatively small portion of the population.

  • Further increases to programs attempting to provide a minimum standard-of-living without adding massive restrictions on immigration would only increase the incentive for immigration from less-wealthy countries, which just increases the ratio of people drawing on benefits to people funding them even further.


For much of its history, the U.S. has been a nation with very heavy immigration with most of that being less wealthy people seeking the opportunity to make a better life for themselves and their families. Most have been people with the drive to work hard and they often brought their families up to U.S. middle-class standards of living within a generation or two. This is great when they are providing for themselves.

However, when the rest of the population is expected to support them, the incentive to immigrate from less wealthy areas increases dramatically while the incentive to work hard (for natives and immigrants alike) drops dramatically. This quickly gets out of hand and drags down the median and average standard of living for the entire population due to the extra taxation requirements on the portion of the population that is providing for the rest. The only way to slow that problem while increasing the guaranteed social safety net programs is to place additional artificial controls on immigration.

And, of course, this is only focusing on the problems stemming specifically from lack of homogeneity. Even in a homogenous culture, a high-tax, high-welfare system reduces the incentive for productivity and tends to reduce median and average standards of living beneath what they otherwise would have been. This is largely why, even after adjustment for which services are provided by the government instead of being paid out-of-pocket, the United States has a median household disposable that is 49% higher than Sweden's, according to OECD data.

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    "This lack of economic homogeneity causes a lot of problems for attempts to implement social safety net programs that attempt to provide an overall minimum standard of living." So the lack of economic homogeneity prevents a way of introducing more homogeneity. Isn't this a catch 22? – Trilarion Mar 9 '18 at 14:48
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    @Trilarion It doesn't prevent all ways of achieving it; just that one. The method of working hard to support yourself that immigrants have historically used to eventually join the middle class in the U.S. continues to work. – reirab Mar 9 '18 at 15:15
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    "Attempting to provide a minimum standard-of-living...": Even agreeing on what "minimum standard of living" means is contentious when your population is culturally heterogeneous. – Ben Collins Mar 9 '18 at 18:46
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    @Trilarion, it isn't just incomes that aren't homogeneous. Expenses are also highly inhomogeneous. For example, an income that would support a middle-class family in Sioux Falls would be effectively poverty-level in San Francisco. – Mark Mar 9 '18 at 22:02
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    Also in the last paragraph, disposable income isn't a good measure because you haven't given the median value of government services received. Productivity also needs to take into account opportunity costs. For example, regardless of social welfare policies, a society that settles on a median value of 160 days off per year vs 140 days off doesn't just lose an average of 20 work days of value per year, it gains whatever value those free days have to the people that decided to live that way. – Teleka Mar 10 '18 at 3:01
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It isn't.

I guess that one could argue that larger countries are more inhomogeneous by definition and that a high-welfare system kind of tries to make things more homogeneously but with a larger inhomogeneity to start with this may be more difficult.

In truth I think this is complete nonsense actually. Large countries are equally suitable for high-tax, high-welfare systems as small countries if their average state of development and wealth are the same. This argument is just an excuse not to do something. I don't see where size of the country directly comes into the equation when considering the collection of taxes and organization of a welfare system. If at all, it will be a secondary effect.

If anything one could adapt the high-tax, high-welfare system somewhat locally within large countries.

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    I like the idea of doing it locally. But, then there is Orange Country, CA. – Jyrki Lahtonen Mar 9 '18 at 9:05
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    @Trilarion Other than personal opinion, do you have anything to back up any statement here? Are there any examples in real life that back up any of the suppositions made? – Keeta Mar 9 '18 at 17:20
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    @FrankCedeno Canada has a low population (so “small” by some definitions) and the USSR system kept its people in poverty and scarcity more than in goods and services. – MAA Mar 9 '18 at 17:21
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    @Keeta There doesn't have to exist an example in order for something to be possible. It also depends on how big a country must be in order to be considered here and how high the welfare to be significant? Out of the back of my head I would name Germany and France which together are quite big, aren't Scandinavian and also have a rather extensive welfare system. Would that convince you? – Trilarion Mar 9 '18 at 19:46
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    I think that this answer, while directly and unequivocally answering the question, is based entirely on opinion. There are no facts or statistics that support your claims. I am not questioning the validity of your answer; instead, I am only questioning its veracity and strength, and I urge you to please include some facts to make it more convincing. – Daniel Mar 12 '18 at 3:15
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Ethnic and cultural homogeneity is a big issue. Scandinavian countries used to be far more homogeneous than they currently are, and that leads to a greater sense of affection for everybody else and their troubles, and therefore people are more willing to support socialistic policies.

But with the changing demographics of Scandinavian countries, you are also witnessing a changing stance on the welfare system. People abusing the welfare system and resting on their laurels has been a common theme in most welfare countries for multiple decades, but it only became a major topic of public attention once the immigrants started doing it.

This obviously applies to the USA too, which is much more mixed culturally and ethnically than Scandinavian countries. Even in terms of ideology and politics, the extremes are apparent. Does a Republican Trump supporter really want to pay for the healthcare of a less well-off lefty? Or what about vice-versa?

Important note: It's very, very, very important to note that above argument is a reason why people don't want a social welfare system.

It is in no way or shape or form a reason why it wouldn't work. So what a politician is really trying to say when they say the US is too big of a country for a welfare system is that the US is too heterogeneous for people to care all that much about one another. This also ties into your gun control policies, and why people seem to care more about their right to possess a gun than dead children.

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    You argument does not hold water since a welfare system does not mean you specifically care about anyone since you are compelled to donate your resources whether you want to or not. It can be argued that Public welfare enforced by the power of the government is done because the individual citizens don't care. Here in my region there are several charities and organizations that take of people that need it because most have enough resources to donate. And Right to have guns does not mean more dead children. Ask yourself why it is happening now and not in the past. – Frank Cedeno Mar 9 '18 at 14:08
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    "This also ties into your gun control policies, and why people seem to care more about their right to possess a gun than dead children." The last sentence I don't understand. Because the US is too heterogeneous the people rather possess guns than avoid dead children? Why does that follow from the heterogeneity? – Trilarion Mar 9 '18 at 16:39
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    I think the level of homogeneity is just a proxy for cultural differences, which I think do matter. The more heterogeneous a population is (and the larger), the harder it is to make a policy that is broadly supported (or is even that coherent). The US is a particularly large and culturally heterogeneous population nationally, so national policies are politically difficult and contentious. The whole point of federalism was to avoid this exact problem (to put it in simplistic terms). – Ben Collins Mar 9 '18 at 18:45
  • "So what a politician is really trying to say when they say the US is too big of a country for a welfare system is that the US is too heterogeneous for people to care all that much about one another." Politically heterogeneous more than socially heterogeneous I think is a very accurate assessment. – curiousdannii Mar 11 '18 at 13:54
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    @BenCollins Humans don't seem to be very comfortable with homogeneity. Put two similar groups in the same room, and they'll quickly assert their heterogeneity. How exactly do you measure homogeneity? The whole point of federalism was to keep as few things nation-wide as possible, and the US isn't by far the only country that used to be federalized in this sense (Germany, Switzerland, British Empire, the Avars and various Mongolian empires...). – Luaan Mar 12 '18 at 11:52
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The statement is true in terms of political will, not as a matter of policy. The point about Sweden being "homogeneous" in that statement basically means that they are all white (and have no significant language, religious, or ethnic divisions that can be exploited politically). Sweden being small is ancillary to it being homogeneous, its small size allows it to be homogeneous when a large country would develop unavoidable divisions between different regions or populations.

In the case of the US, racial divisions has been tied to economic policies. For example, Lee Atwater (RNC chairman as well advisor to Reagan and Bush 41) said this about racial issues and how it tied to tax policy (among other things):

You start out in 1954 by saying, “Nigger, nigger, nigger.” By 1968 you can't say “nigger” — that hurts you. Backfires. So you say stuff like forced busing, states' rights and all that stuff. You're getting so abstract now [that] you're talking about cutting taxes, and all these things you're talking about are totally economic things and a byproduct of them is [that] blacks get hurt worse than whites. And subconsciously maybe that is part of it. I'm not saying that. But I'm saying that if it is getting that abstract, and that coded, that we are doing away with the racial problem one way or the other. You follow me — because obviously sitting around saying, “We want to cut this,” is much more abstract than even the busing thing, and a hell of a lot more abstract than “Nigger, nigger.”

A robust welfare system just happens to be easily attacked when privileged and disadvantaged populations can be divided on something like race. Note that this is not a prescriptive answer, I'm not saying people should try to establish various ethnostates and theocracies so that people within a country can get along better, but things like racial divisions are a political reality that would need to be overcome.

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    So you basically say that the US still suffers from racial tensions and that prevents the implementation of higher welfare measures there? – Trilarion Mar 9 '18 at 16:43
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    @Trilarion It's one of the biggest and most obvious problems, but there are others. – Teleka Mar 10 '18 at 3:09
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    I wouldn't want want my children to be forced to be bussed to a school an hour away when there's an equivalent school 15 minutes away, no matter the racial make up of the other school. – RonJohn Mar 12 '18 at 3:07
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The theory is that it's due to ethnic/economic homogeneity.

i.e. In a homogeneous society, people recognize everyone else as being like themselves, and are therefore more inclined to make sacrifices (i.e. paying taxes) to support benefits for others in that society, because they can empathize with them.

I'd also add economic equality as a starting point. In that case, you have a state where the vast majority contribute towards the common good, and the vast majority benefit from the same common goods. So everyone pays towards schools and hospitals, and everyone uses those schools and hospitals.

Such things are easier to achieve in small countries, both population and geography wise, but there are exceptions, as you mention.

Now, if we take countries like the USA, we have considerable ethnic diversity and economic inequality. So - rightly or wrongly - people don't feel as much of 'we are all in this together, we are all the same'. And there ends up being a distinction between contributors (the wealthy, who pay a lot of tax but don't use public services) and recipients, who pay little tax but use those services.

Politicians will exploit this, of course. Indeed, this is the real reason why you might say that the US is 'not suitable' for a high-tax/high-welfare system; it is simply too easy at the moment for some politicians to gain traction by playing off different groups against each other.

  • "..it is simply too easy at the moment for some politicians to gain traction by playing off different groups against each other." This means that if the different groups in the US could come together somehow despite the size of the country, the path to for example a higher level of welfare would be open? – Trilarion Mar 9 '18 at 16:45
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Welfare is effective in environments where it is reasonable to give something away "for free," and expect that the person receiving it will do something valuable enough with it to have been worth giving it away in the first place.

If a group is homogeneous, it is easier to make a justification like this because you can make the assumption that the person on welfare has similar ideals to you, and will pursue those ideals with your free gift. In a highly diverse environment, this justification becomes more complex. It becomes harder to have confidence that their use of the gift will be "good."

Likewise, the smaller the group, the easier it is to treat the individual receiving the welfare as a person, with unique hopes and dreams and aspirations. The larger the group, the harder it is to do so and the easier it is to start treating them like WelfareRecipient_0438739. This effect has been well captured in the concept of Dunbar's Number. The effect is very well documented for groups up to 150, and reasonably documented up to 1500. But I do believe that if you look at how societies are built, it is reasonable to assume that this effect scales. The less human a welfare recipient is, the harder it is to justify giving them the money simply because they are human. For example, we tend to assume that humans can converse with us, and slowly change their opinions "for the better" over time. If we give a human a gift, we may feel like they'd squander most of the gift, but if we can use the opportunity to change the way they think, eventually they may begin to spend gifts in a way we find more valuable. WelfareRecipient_0438739 is not a human, so much as an ID you assigned to the paperwork for that human. It's unlikely you have the delicate tools required to help a human grow in this way through such inhumane paperwork, mostly because its hard for you to listen to WelfareRecipient_0438739's voice through bureaucratic instruments.

Of course, all of this doesn't mean that it's impossible to have high-tax/high-welfare in a large hetero-genus group. It may be entirely possible. But it shows that there are some built-in difficulties which make it more challenging.

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The tone of this question points to the problem. In the USA, it is very hard to get unfiltered information about how other countries work, and people are indoctrinated by all the flag-saluting in school to believe that their country is the best. I have experienced similar mass delusions about exceptionalism in other countries, notably Mexico and Indonesia, which also do the flag-worship thing to their children. Patently the USA is not exceptional - e.g. equality, well-being, and access to healthcare and justice are very low by international standards. The economic success of the USA is down to initially high levels of natural-resource availability and continued high levels of immigration. The latter both maintains a cheap labour supply and freeloads on the education of skilled workers in other countries. But anyway - the discussion about the relative importance of private enterprise and government is universal and interesting. My view is that both are important - clearly a society like the USA's, where social mobility is tiny, is very wasteful of talent. But talent needs an incentive. It is useful to note that the societies that score best on human happiness are intermediate between the extremes of say USA (where the lack of a safety-net makes inovation very risky) and say Venezuela (where extensive state intervention makes inovation unrewarding). I think it's healthy for countries to keep exploring this range, and give people the freedom to choose another country if they want. The real risk is that populist kleptocrats such as Trump and Putin might succeed in grabbing all the resources for themselves, and then close the borders, Kim Jong Un style. Get out while you can, my American friends! You have nothing to lose but your indoctrination!

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    +1 For bringing up the point that the Americans are strangely reluctant to learn from other countries. I could not help noticing that during my stay. I'm not sure whether you put your finger on the root cause, but the phenomenon is there. May be we should point out that when the Americans do realize the need for some level of welfare reforms, they would save tons of money by looking around, and learning from the things that didn't go optimally elsewhere :-) – Jyrki Lahtonen Mar 9 '18 at 15:43
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    Try splitting this into paragraphs for easy reading off a screen – James K Mar 9 '18 at 23:05
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    While I stand by my first comment, I do want it on record, that what I meant with I'm not sure whether you put your finger on the root cause is my hopefully polite way of saying the same thing Deolater said in their comment (that I also upvoted). US bashing is occasionally fun, but the goal should also be to understand. – Jyrki Lahtonen Mar 11 '18 at 11:13
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    "USA (where the lack of a safety-net makes inovation very risky)" You're joking, right? – RonJohn Mar 12 '18 at 3:11
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There's tons of answers but they are all handwavy without research evidence.

Actual research backing up this assertion is research into Social Capital and specifically the effects of homogeneous/heterogeneous society has on that (the most famous research is by Putnam, in part notable because the results were so "not good" from his point of view that he delayed publishing the research).

In short, the more homogeneous society, the more social capital (in plain speak, trust) it has, the more social benefits come from that.

  • I wonder what is meant by homogeneous society here? Economically, socially, culturally, politically? – Trilarion Mar 9 '18 at 14:54
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    Socially is how I mostly read it but there are many factors – user4012 Mar 9 '18 at 16:07
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    Not that research is a bad thing, but the theory of Social Capital currently seems about as handwavy as anything else going... – agc Mar 10 '18 at 4:18
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It's related to level of trust.

For one, level of trust in the central government is not high enough to implement such a drastic change. Look at ACA [some minor changes - compared to implementing universal healthcare - to make the current system look more like universal health care] as an example of a relatively minor change that was very difficult to implement. In fact it hasn't been implemented in a working, stable form yet - it has already been set up to explode by the next administration a mere 11 months after taking office. That level of trust is correlated to size of the "country", but there are many other factors involved as well.

For the other, level of trust in the politicians is important as well. A politician who is seen as wanting to create a massive disruptive change to the country is often undesirable to at least a large minority of voters. Having a large minority of voters against them lessens a politician's chances of keeping/gaining their job. While there are ways around that, many politicians see this as undesirable. If a politician wants to prevent being branded as someone who wants to implement a massive disruptive change, a good strategy is to make up a believable mock argument that explains why that massive disruptive change doesn't make sense.

protected by Sam I am Mar 11 '18 at 0:51

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