The statistical evidence shows that the US has become dramatically more social democratic since the 1960s, so any problems that have emerged can be attributed to social democracy, not libertarianism.
See the effect of public sector unions and collective bargaining on public education:
https://academic.oup.com/qje/article-abstract/111/3/671/1839...
(copy-pasting)
Every Western nation has massively increased social welfare spending over the last 50 years. Some more than others. Look at the US for example:
https://fivethirtyeight.com/features/what-is-driving-growth-...
Annual spending growth (inflation adjusted) on various components of social welfare spending (1972 - 2011):
>Pensions and retirement: 4.4%
>Healthcare: 5.7%
>Welfare: 4.1%
Annual economic growth over the time frame:
>2.7%
I have to reiterate that this is annual growth. Many people have turned around and said "4% over 40 years is nothing", missing the fact that it's not 4% over 40 years. It's 4.8% every year, over a span of 40 years.
This represents a massive shift to social democracy.
And the shift has been associated with plummeting labour productivity growth, plummeting wage growth, a slowdown in life expectancy gains, and an explosion in single parenthood:
http://web.archive.org/web/20170529115412/https://pinetreewa...
More generally, there's a negative correlation between government spending levels as a percentage of GDP, and economic growth rates. Your implication, that society is better off with high levels of taxation, is not supported by the science on the matter.
The evidence strongly suggests economic development is most rapidly achieved through adoption of pro-market policies.
The last 30 years has seen the largest most rapid reduction in the global poverty rate in human history, and almost all the decline in poverty was due to economic development, which economists have concluded was massively facilitated by the spread of market institutions like property rights:
1. https://www.theatlantic.com/magazine/archive/2010/07/the-pol...
2. https://www.csmonitor.com/World/2016/0207/Progress-in-the-gl...
3. https://www.economist.com/leaders/2013/06/01/towards-the-end...
There is no reason to assume that this relationship between pro-market policies and high rates of economic growth stops existing for advanced economies.
We see indications of it manifesting across the developed world, like the superior performance of Hong Kong and Singapore relative to other developed economies, or Iceland relative to other Nordic countries, or in cross-European studies correlating low tax rates with high economic growth rates.
Economic growth is the primary source of all improvements in quality of life, so we should have policies that maximize it. It is how an advanced economy comes to be that way.