Forget small cars, Americans should embrace (and demand more) public transit. Switching everyone to small cars is putting a bandaid on a gaping open wound.
This is a Hard Problem. In almost all parts of the US, mass transit is just awful, which is a huge part of why people don't use it. But people not using it means that there's no funding to make it no longer awful (which would require massive amounts of funding).
Why not do both things? It will take a long time to undo the awful urban planning of the 20th century, and many people will still drive cars in the meantime; better that they are small and efficient.
I have no desire to do such a thing. Being harassed by mentally ill people on the subway is not something I want to subject myself and my family to. If you've ever tried riding a bus or the train in LA or San Francisco, you'll know what I'm talking about. It can be a scary experience.
If you've ever taken a bus or train in ... most places in Europe...you'll know it's not a law that public transport = dangerous and full of meth heads.
Public transport _can_ be good if you have a society that treats its poor well and highly respects and desires clean and good public transport and is willing to fund it.
I lived in LA for almost a decade (leaving in 2020) and, despite hearing these horror stories, never once had that experience. And I rode the light rail at least 3-4 days/week. Instead what I saw was a largely unused public transit system that passed by hundreds of thousands of cars sitting in traffic on the 10 and 101.
During that same time period I used to commute to SF for work 1 week per month and used BART and public transit almost exclusively. Also never had that experience.
In both, I definitely SAW homeless people, some of whom were likely mentally ill, but seeing them and being harassed by them are totally different things. The latter is mainly fiction. By contrast, I’ve been harassed (at gunpoint) by middle-class “sane” drivers in a bout of road rage.