Arnold doesn't come right out and say it

but Robert Solow could be delusional:

The main function of health insurance is not to provide insurance. Insurance would mean catastrophic coverage. The main function of health insurance is to maintain the delusion that health services are free. The main beneficiaries are health care providers, who have the demand for their services boosted by the illusion of no cost, even as they charge for their services. (Individually, doctors may hate insurance companies and think that the insurance companies drive down their incomes. But collectively, without the demand boosted by insurance, many medical practices would be out of business.)

Defined-benefit pension plans are a mass delusion. The promise to pay a specific pension, regardless of circumstances, is unsustainable. Solow implies that companies are moving away from defined-benefit plans because companies have become nastier. In fact, as the period of retirement lengthens and becomes more uncertain, defined-benefit plans are very likely to blow up.

Government is the only institution that can promise a defined-benefit plan. But are government plans a mass delusion? I suspect that they are. Certainly, if you include Medicare, we know that as currently structured it will not exist 20 years from now.

Solow says that a welfare state can be sustained by encouraging "good citizenship" and a work ethic. Yet all of the good social cues don't seem to stop the retirement age from falling, even as longevity goes up. I would not count on the Nordic social welfare system to remain in place forever.