When Senator Bernie Sanders announced his campaign for the presidency, the term “Democratic Socialism” has been heavily thrown around in political discourse. However, people who believe in Sanders’s “Democratic Socialism” are often liberal, while those who are actual Democratic Socialists, often criticize liberals. In part, the reason is that Democratic Socialism would nonetheless mean further democratization and public ownership of the economy than currently exists. On the other hand, public ownership of the main productive assets is limited in comparison to what it could be in Social Democracy.
I think [democratic socialism] means the government has got to play a very important role in making sure that as a right of citizenship all of our people have healthcare; that as a right, all of our kids, regardless of income, have quality childcare, are able to go to college without going deeply into debt; that it means we do not allow large corporations and moneyed interests to destroy our environment; that we create a government in which it is not dominated by big money interest.
First of all, at risk of stating the obvious, I think it is important to be clear that terms like these, especially democratic socialism, have politically contested meanings. To understand what is meant by them, it is important to look closely at who is using the term and who their intended audience is. It is also helpful to keep in mind that the meanings of these terms have changed over time.
The concept of "social democracy" is the older of the two, by about a century. It was originally popularized by the Social Democratic Party of Germany (SPD), which was formed in 1863. Their initial platform called for basic rights we associate with social democracy today. However at the same time, the platform was explicitly socialist and anti-capitalist. Karl Marx famously critiqued that original platform, but the party also continued to engage and identify with Marxism over time.
The term "democratic socialism" is newer and, at least until very recently, has never been quite as widely used. In the early 1970s, the declining Socialist Party of America took on the name Social Democrats, USA. A prominent defector from the party at that time, Michael Harrington led the formation a committee which later became the Democratic Socialists of America (DSA). The split was essentially about their stance towards capitalism, which the Social Democrats defended. The DSA supports similar social democratic reforms, but also seeks to replace capitalism. Although the DSA remained small for decades, it has grown dramatically in recent years and has been closely tied to the Sanders campaign.
As a result, I would say that in the United States today, social democracy refers to a familiar set of pro-welfare policies. Some supporters of those policies ("social democrats") see these policies as a way of reforming and strengthening capitalism. Other supporters of very similar policies ("democratic socialists") see them as a step toward replacing capitalism with socialism.
Is Bernie Sanders a social democrat then, or a democratic socialist? In my opinion, he is intentionally ambiguous about that because he wants and needs support from both groups. The DSA and other democratic socialists hope to further their goals through his campaign, even if many suspect he is more of a social democrat in his own views.