And one should note that Denmark, as per the article, has a lot of free-market business practices, despite the blustering income tax rate.

Oh yeah.  Unlike most countries they decided "We want this... how can we make it work for our country."

Rather then just voting in whatever the people want and trying to work around it.  Which is the downfall of democracies in general.

A quick google resulted in the following:

What could (easily) be argued from the data is that, while the GINI co-efficient is "Better" in many welfare states, is that the "Poor" receive no real benefit from a welfare state all that happens is that the "Rich" are worse off and the system on the whole is worse off ...

To look at things another way ...

If you have a society where there is perfect equality, and earns a uniform wage, then there is no incentive to invest your resources (physical, emotional, intellectual or financial) towards making society better because there is no reward. On the other hand, if you have a society where there is perfect inequlity, and your wage is entirely based on arbitrary considerations (race, class, caste, or political connections), then there is no incentive to invest your resources (physical, emotional, intellectual or financial) towards making society better because there is (once again) no reward.

What society needs is a good balance of equality (an elimination of arbitrary barriers that prevent people from achieving their goals) and inequality (a reward system which benefits those people who make personal sacrifices in order to benefit society). The best way to measure whether one system was "Better" than another at achieving this would be to determine where the economic growth was the fastest, because that would mean that there was the greatest incentive for people (on the whole) to benefit society.

I have yet to see any statistics that demonstrate that over a reasonable period of time (20+ years) a welfare state can produce faster economic growth, unless the welfare state began at a much lower economic level.

Is the USA's economic system ideal? Probably not being that there is still a high number of people who drop out of highschool, choose a life of crime, or otherwise choose a path that does not encourage the benefit of society on the whole.

Is the USA's economic system one of the best in the world? If you look at long term growth trends the answer is (probably) yes.

If the US is such a welfare state why are their millions of homeless people???

Unemployment rates are typically higher in welfare states, that's true. Welfare makes it easier for companies to fire people, and it puts less pressure on the government to create jobs. However this really is a minor problem compared to the benefits.

Claiming that redistribution of wealth in a capitalist economy doesn't increase overall happiness is irrational. Money helps a poor man more than it helps a rich man. The question is whether or not such redistribution has any major undesirable side effects. The common complaints from the far right is that "welfare makes people lazy", and "welfare is too expensive, it will ruin the economy". However a quick glance at the UN human development index proves these claims are not true. In fact if you look at the Gini index you'll see that there's a very clear correlation between income distribution and economic wealth, the exact opposite of what the far right wants you to believe.

http://en.wikipedia.org/wiki/Human_Development_Index
http://en.wikipedia.org/wiki/Gini_coefficient

You claim that private welfare works as well as public tax funded welfare. This is simply not true. If you look at life expectancy, infant mortality rate, murder/crime rates, and social mobility, (statistics that poverty tend to greatly affect) the US lags far behind the rest of the developed world.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2102rank.html
http://en.wikipedia.org/wiki/List_of_countries_by_infant_mortality_rate
http://en.wikipedia.org/wiki/Murder_rates
http://en.wikipedia.org/wiki/File:Prisoner_population_rate_UN_HDR_2007_2008.PNG
http://www.guardian.co.uk/society/2005/apr/25/socialexclusion.accesstouniversity

Needy get a smaller slice of charity:
"For most Americans, "charitable giving" connotes donating their resources to help those who are less fortunate to better their situation. Yet how much of charitable giving actually goes to benefit the neediest in society? According to recent studies, much less than most people expect." http://www.csmonitor.com/2007/1119/p13s01-wmgn.html

It's better to be poor in Norway than in the US:
http://www.csmonitor.com/2005/0414/p17s02-cogn.html

Denmark is an ultra liberal welfare state. With the possible exception of the Netherlands, Denmark has the most generous welfare system in the world. Denmark also has the highest income tax rates and the highest sales tax rates in the developed world.

Calling Denmark "less socialist than the rest of Europe" implying that Denmark is somehow more like the US, is absurd. Denmark is pretty much the exact opposite of a right wing libertarian dream world.

Denmark is an example how how the world should be. The US is not.

You cannot directly compare income levels the way the author of that article does. There are too many variables that affect quality of life. For instance in the US a minimum wages worker has to spend a significant amount of his income on things like health care and education. In Finland quality health care and education is free. Thus a finnish worker can survive on a smaller income.

The only scientific way of telling in which country the poor are better off, is to compare things like life expectancy and infant mortality rates. And if you do, Finland comes out much better than the US. For instance the infant mortality rate is twice as high in the US.

As for the rest I actually agree with a lot of what you write. Except for the following:

"The best way to measure whether one system was "Better" than another at achieving this would be to determine where the economic growth was the fastest, because that would mean that there was the greatest incentive for people (on the whole) to benefit society."

You sound like Milton Friedman. The obvious problem is that there's a *lot* we can do to improve the economy that we aren't doing, simply because doing so will massively increase suffering in society. We can legalize slavery. We can legalize child labour. We can kill everyone above the age of 60. But would that give us a "better" system ?

"I have yet to see any statistics that demonstrate that over a reasonable period of time (20+ years) a welfare state can produce faster economic growth, unless the welfare state began at a much lower economic level."

Norway ?
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

Besides, the US is extremely rich in natural resources compared to most other developed countries. This obviously gives the US an edge. Then there's the advantages of being the biggest country in the developed world, which is the main reason for the US dollar's dominant position in the world economy. You shouldn't be so quick to assume libertarian ideas are the primary reasons for the US success. Milton Friedman and his "Chicago Boys" were given more or less free reign in fascist Chile from 73-90, and contrary to popular libertarian myths, it did little for the economy.
http://en.wikipedia.org/wiki/File:GDP_per_capita_LA-Chile.png

Welfare for the poor shmuck=bad. Welfare for the corporations=standard op.

Not true at all... most of Denmarks other policies in regards to labor are very un socialist.

For example the fact that 30% of Danish workers change jobs every year.

In healthcare and unemployment... they are very libreral.  In other parts they are very libretarian.  For example the above mentioned ability to fire anybody.

It's "flexwork" and it's successful for small countries like Denmark, but it provides huge challenges in larger countries.