Are Obama's Policies Ushering in Era of Socialism?

With taxpayers shelling out $700 billion to bail out Wall Street and another $787 billion to jolt the sputtering economy, serious questions are being raised about whether all the government intervention is taking the country down the path to socialism.

Numbers show the U.S. is drifting ever closer to the socialist systems popular within the European Union. In 1999, government spending made up 34.3 percent of gross domestic product, or GDP, the broadest barometer used to measure the health of the economy. That number is projected to grow to nearly 40 percent by next year.

Government spending within the majority of European Union nations averages 47.1 percent of the GDP, meaning the U.S. is roughly seven points behind -- closer than ever before.

But whether that equates to socialism here depends on whom you ask.

"A technical definition of socialism is that the government owns the production, it owns the factories or the plants or the businesses," said Heather Boushey, a senior economist with the left-leaning Center for American Progress.

"That's not what's happening here," she added. "It's not that the U.S. is buying up all the factories or businesses. What's going on is we're making investments to get the private sector back on track."

Peter Morici, a University Maryland business professor, said the all of the government spending "runs counter to the basic idea of Jeffersonian democracy, that it's the individual who knows best. The government is there to set up a framework for the individual to prosper, succeed and create wealth."

Morici said America is headed for a European-style social democracy of the 1970s.

"A large state sector, some state ownership of enterprises, big enterprises like banks and automobile companies and a lot of inefficiency that goes with it," he said.

But Boushey disagreed.

"We are looking at an economic crisis caused by the collapse of our financial sector," she said. "If we don't get people back to work, the problem will spiral out of control."

Critics warn that's exactly what happened in Europe when it implemented socialist reforms, forcing unemployment into the double digits.