AFAIK, many European countries have been doing that for some time
now. Their citizens have a relatively high purchasing power, yet they
still have relatively successful and extensive social programs.
The ideology that there must be something wrong with you if you don't
make enough money to, not only feed yourself and your family, but also
purchase a large house on a large tract of land and at least two cars is
almost exclusively American. Of course, like most things American, it's
been spreading like a pleague.
Not to say that Europe is a utopian society and the US should emulate
it to the farthest extent possible, but the current trend of being as
exactly oposite as possible is counter-productive, IMHO. There
definitely are some things to be learned from the European model.