Given the unimaginable atrocities committed by totalitarian regimes (Nazi and Communist) during the 20th century, it is understandable that most want to keep the Leviathan on a short leash.

However, much of this talk of totalitarianism is purely polemical. The bankers and industrialists tried to brand FDR a Communist, and they tried to do the same to the labor unions as well. The idea is to paint the enemy with the face of evil so as not to have to debate his actual arguments:

The American labor movement was almost completely bereft of the ideological weapons, which the rebellious industrial masses of Europe carried. In its inception it disavowed not only Marxist revolutionary formulas but every kind of political program. It was a pragmatic movement, born of the necessity of setting organized power against organized power in a technical society. Gradually it became conscious of the fact that economic power does try to bend government to its own ends. It has, therefore, decided to challenge a combination of political and economic power with a like combination of its own...

Naturally, the "semi-official" creed of a bourgeois community, as distinguished from the philosophy which informs our Constitution, was arrayed against this development. The right of collective bargaining was declared to be a violation of the rights of employers to hire or fire whom they would. Supreme Court decisions, directed against the labor movement, were informed by the generally accepted individualistic creed. But ultimately, in the words of "Mr. Dooley," the court decisions "followed the election returns."

Long before the "New Deal" radically changed the climate of American political life the sovereign power of government had been used to enforce taxation laws which embodied social policy as well as revenue necessities; great concentrations of power in industry were broken up by law; necessary monopolies in utilities were brought under political regulation; social welfare, security and health and other values which proved to be outside the operations of the free market were secured by political policy. More recently, housing, medicine and social security have become matters of public and political policy. All this has been accomplished on a purely pragmatic basis, without the ideological baggage which European labor carried.

--Reinhold Niebuhr, The Irony of American History

When a woman's first pregnancy results in triplets which of the three children would you deny health and education benefits?
What Rogers is describing is Scandanavian socialism which actually enables certain freedoms denied to Americans due to inability to pay. For instance fathers of newborns are paid to stay home and assist the mothers in caring for the infants. Things like universal health care and retirement support actually work to limit the number of pregnancies. In poor societies where everyone must rely on the extended family for health care and old age support then women are pressured to maximize the number of children born.

Toby Kelsey: If I could express the thoughts that are bouncing around in my brain, I would have written your post. I think you are right on the money.

Once Pigovian taxes restrict economic activity to using resource flows only, then "capitalism as we know it" can continue. Provided capital accumulation is restrained, then many causes of our current problems (huge inequality, political crises, control by the financier class, short-term profits uber alles) can be avoided.

This sounds great in theory but if Pigovian taxes restrict economic activity to flows only, there IS no economic system, at least for billions. Perhaps that was your unspoken intent. In a word, I think what you propose would work, but between here and there might be a revolution. Less than 10% of our energy is currently 'flow based', and none of it liquid fuels. There would need to be some sort of transition period. All the 'good answers' to current crisis require more pain for pretty much all sectors of OECD nations - accepting greater short term pain for long term benefit is not how we are wired so acknowledging this necessity by politicians has to happen before any of these neat theories can germinate.