First, let's talk about socialism.
Strictly defined, socialism refers to government owning the stuff that private businesses typically own. Under strict socialism, buildings, fixtures, vehicles, tools, machines, goodwill, etc. all are the property of the state. But that's not what we mean when we use the word today. Socialist Bernie Sanders isn't calling for government nationalization of business assets. He just wants free medicine, education, housing, food, transportation, etc. provided by the federal government. How he intends to get there is never fully fleshed out.
And that's the point. Socialism is not a specific policy set. It's more a mindset. It starts out being about economic issues and ends up being about power. If you believe that the federal government should provide basic human services to its citizens, then you are a socialist. If you understand that this kind of cure is always worse than the disease, then you are not. (State and local governments providing basic human services is a subject for another day...)
Governments have myriad ways to provide basic human needs other than the obvious. No taxes need be raised or assets forfeited. In the 1990s the U.S. federal government wanted to provide home ownership to unqualified borrowers, so they simply simply changed mortgage requirements. All of a sudden any person, regardless of credit history, could obtain a mortgage. We know where that led in 2008!
Those policies are alive and well even today. No one would accuse Donald Trump of being a socialist, yet under him pretty much every new mortgage in the U.S. is still owned by a government sponsored enterprise (GSE) like Fannie Mae and Freddie Mac. Those liabilities do not appear as spending until a crisis hits, as it did during the sub-prime financial crisis.
Since about 1982, government spending has consumed more than 50% of the private sector in the U.S. That is what I consider the tipping point. Again, the mindset is the important thing. Once the predominant belief is that the federal government should provide for basic needs, and that those needs are actually rights, then it's only a matter of time before that leads to totalitarian power.
Why call it totalitarian? Because without a limiting principle the socialist mindset always goes there. Once the federal government is in the business of providing basic needs for free, it's just a matter of time before they have to confiscate everything: your money, your power, your freedom, etc. in order to do that. That always happens in socialist countries that lack limiting principles.
Limiting principles are what saved the Scandinavian countries. Prior to the 1960s they were free market countries and were models of health, literacy, productivity, and happiness. Then in the 1960s they became enamoured with socialism. After about fifty years of progressive socialism they realized the costs. Wealthy citizens were fleeing, businesses were moving, economies were lagging, and the fiscal trajectory was ominous. So they dialed it back, refusing to go down the totalitarian road.
Today, they still retain some of the legacy items like socialized medicine, high taxes, and fiscal risk, but the mindset has changed drastically. The Prime Minister of Denmark recently admonished Bernie Sanders for calling Denmark a socialist country. In a 2015 speech at Harvard he said:
"I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy."Sweden also backtracked. Both countries economies improved.
Similar results can be seen in the U.S. after the modest two year Trump reversal that is evident on the graph above. To be clear, many manifestations of Trump's reversal cannot be seen in the numbers. Deregulation for instance, a huge part of Trump's reversal, does not show-up on a spending graph.
Regardless, Trump is an anomaly. We can see that the socialist mindset has inexorable momentum. We were at 10% on the Undiepundit Socialist Index when WWI broke out. One hundred years later, we averaged about 70% under Barack Obama. (Notice: the other two big spikes were for major World Wars!)
It didn't "feel" like government was consuming 70% of the private sector from 2008 - 2016 because of borrowing and printing. Federal debt doubled to $20 trillion and the Fed added $3.5 trillion to its balance sheet. $13.5 trillion from thin air can temporarily mask a lot of pain!
Sorry, we've been motoring towards totalitarian socialism since FDR. Donald Trump is probably just a speed bump on that road.