I somewhat agree with your point, but defense spending in the U.S. is only 3.1% of GDP. It's likely that we could have both Pax Americana and universal health care if the public/private divide were allocated differently. Medicare spending is roughly on par with defense and covers the most expensive patients; the government already pays for 64% of healthcare spending. Bump spending up to about $1T (5% of GDP) and you've got universal health care.

If you look at what Germans actually give up in exchange for the social safety net, it's the ability to get fabulously wealthy. If you're say a high-achieving software engineer or surgeon, it's possible to make roughly 10x more in the U.S. than in Germany - and that's saying nothing about startup founders or CEOs. Hence, people who fit into those categories tend to emigrate.

Your personal value system will determine whether you value the ability to get fabulously wealthy over the ability to know that you'll always have health care and education for your kids. There's a pretty strong selection bias within countries though: many people in America moved there (or their ancestors did) because of the ability to get fabulously wealthy, while the people left behind in the Old World tended to stay because they valued stability. That's perhaps why proposals for a strong social safety net haven't gotten much traction, particularly in the post-80s boom.