Socialism refers to various theories of economic organization advocating public or direct worker ownership and administration of the means of production and allocation of resources, and a society characterized by equal access to resources for all individuals with an egalitarian method of compensation. In Marxist theory, socialism is a transitional phase between capitalism and communism characterized by unequal distribution of wealth and compensation according to work done.  Contrary to popular belief, socialism is not a political system; it is an economic system distinct from capitalism.
Forerunners of communist ideas existed in antiquity and particularly in the 18th and early 19th century France, with thinkers such as Jean-Jacques Rousseau and the more radical Gracchus Babeuf. Radical egalitarianism then emerged as a significant political power in the first half of 19th century in Western Europe. In the world shaped by the Industrial Revolution and the French Revolution, the newly established political left included many various political and intellectual movements, which are the direct ancestors of today’s communism and socialism – these two then newly minted words were almost interchangeable at the time – and of anarchism or anarcho-communism.
Capitalism typically refers to an economic and social system in which the means of production (also known as capital) are privately controlled; labor, goods and capital are traded in a market; profits are distributed to owners or invested in new technologies and industries; and wages are paid to labor.
Democracy is a system of government in which either the actual governing is carried out by the people governed (direct democracy), or the power to do so is granted by them (as in representative democracy). The term is derived from the Greek δημοκρατία (dēmokratía (info)), “popular government”, which was coined from δῆμος (dêmos), “people” and κράτος (krátos), meaning “power” in the middle of the fifth-fourth century BC to denote the political systems then existing in some Greek city-states, notably Athens following a popular uprising in 508 BC.
In political theory, democracy describes a small number of related forms of government and also a political philosophy. Even though there is no specific, universally accepted definition of ‘democracy’, there are two principles that any definition of democracy includes, equality and freedom. These principles are reflected by all citizens being equal before the law, and having equal access to power. Additionally, all citizens are able to enjoy legitimized freedoms and liberties, which are usually protected by a constitution.
Technically, Obama was/is engaging in a socialist act when he purchased majority shares of several organizations (banks, car manufacturing, etc). We shall see in due time whether that was a wise act or something less. It may have been the action that put the economy back on chart. It may have been wasted money. Time will reveal it’s truths.
Many in America are comparing a Political Theory with an Economic Theory. It’s apples and oranges. One can be both Socialist and Democratic. One can be both Capitalist and Democratic. One can not be a pure Socialist and engage in Capitalism or vice versa. Though China is proving that one can be both Communist and Capitalist right before our eyes or perhaps they are simply oligarchic capitalists.
When someone states that Obama is Socialist that does not preclude him from being Democratic in political system preference.
President Obama is more Socialist than say Forbes or Reagan (perhaps). He’s no more Socialist than Bush in my opinion. Bush approved/extended a few programs that many might consider Socialist and if he had been able to sit for a third term, I believe, he would have acted much as did Obama.
On the question of health care, The United States must care for it’s citizens in our post-Industrial age. The economy and capitalism is not going to do this nor are they designed in theory to do so. Companies are attempting to cut back on expenses to improve the bottom line. Canceling health care benefits. Canceling pensions. And so on and so forth. If the United States is going to be a Nation of values and humanity going forward, it must care for it’s citizens. Health Care is an important part of that plan. In my opinion. If America is truly a Nation of, by and for the people, then Health Care is and must be a priority.
It will likely mean heavier taxes. Personally, I think some of those taxes should come from the businesses that benefit from American Capitalism, the Federal Government and from our military protectionist adventures around the world. Some must come from the citizens themselves.
Additionally, I think in order for citizens to qualify for said health care, they should be willing to serve in some capacity the country that provides these benefits and “entitlements.” “To whom much is given, much is expected” after all. Some want much and expect to give nothing in return.
Welfare as we know it should be heavily reformed as a means to cut spending. To qualify for welfare, I believe, that one should show that one is working towards something such as higher education or some sort of self improvement. Welfare should be a graduated system rather than an all or nothing system. If recipients are not working towards some goal, they should be willing to work in some service category such as working for an NGO or volunteer work or community service of some sort. I’m completely against giving anyone’s tax dollars away for nothing for all or a great many years of one’s life. Disability and ill-health should be taken into consideration, of course. I know too many people back home in Kentucky who have never worked a day in their trailer park livin’, mayonnaise sandwich eatin’ lives. Yet, they sit and collect tax dollars in the form of food stamps and other forms of social services. Some of these folks sell drugs on the side or engage in other illicit activity. Many do not.
Corporate welfare and other handouts should face heavy scrutiny as well. Why are we giving corporations and other entities these moneys or tax breaks. Foreign aid and foreign military support should be scrutinized in the same manner. Why do we still have forces in Europe? Korea? Japan? It’s time to pull out of these places. Those forces could be better deployed elsewhere or home. Why are we funding despots when we should be pressuring them to reform. If they haven’t reformed by now, it’s not going to happen in most cases. We have carrots with no sticks following on.
Socialism and Democracy can co-exist and America has proven this to a more or less limited degree over the past 70 or so years. Sweden is rated the most democratic country in the world according to the links below. It also engages heavily in social welfare. I don’t know if larger countries can maintain that same model. But, perhaps, it is worth the chance.