Reforming the welfare state is a prominent topic on the public policy agendas in both the United States and Germany. Critics of European systems of social provision frequently implore us to look to the U. S. for models of change in order to adjust to new global economic challenges. Defenders of European-style social provision argue that the very existence of social safety nets allows people to be flexible and innovative without fear of falling through the cracks. Admonitions about the pitfalls of the ‘Standort Deutschland’ are countered by warnings about ‘amerikanische Verhältnisse.’