In what sense is the US richer?
Average gross domestic product (GDP) in the US is about 40% higher than average GDP of the EU-15 when measured at purchasing power parity (PPP). The gap is slightly greater if we consider either the twelve Eurozone members (EU-12) or add the accession states (EU-25). Although GDP is a poor indicator of measure of welfare or happiness, let’s agree to use it for the sake of comparison.
When we adjust for both these factors and look at GDP in 2005 per person per hour worked, there is virtually no difference between Germany, France and the US.
Economists often speak of this as revealing different American and European social preferences for work and leisure. In truth, both the employment rate and how long the average person works are explained mainly by political history. Until the late 1970s total hours worked were falling both in Europe and in the USA; since then, total hours worked have continued to fall in the EU-15 but have risen again in the US. Equally, if we look at employment data by age group, Americans join the work force earlier and leave it far later than Europeans. The key to understanding why this has happened is the change in US income distribution over the past 30 years. Since 1979, the bottom 40% of income earners in the US has been treading water, while the bottom 20% has become poorer. US workers have needed to put in more years and longer hours simply to maintain their real income position.
Who has Faster Growth?
Does the US grow faster than the EU? Again, the answer depends on what we measure. When we compare the growth rate of GDP of the US and the EU-15, the US rate averaged over the past decade is about 1.2 percentage points higher than that of the EU-15 (oddly, the difference is slightly smaller if we use the EU-25). But the usual measure of growing prosperity is GDP per head; i.e., if GDP grows at 2% but population grows at 3%, then GDP per head is falling! US population growth is a full percentage point higher than that of the EU-15, mainly because US immigration in the past decade has been higher. Expressed on a per capita basis, GDP growth rates in the US and the EU are virtually the same over the past decade. The same is true of labour productivity growth.
What is also true is that since the 2001 recession, the US has bounced back faster than the EU. At present, both GDP growth per head and labour productivity are growing faster in the US. But recent US productivity gains are concentrated in distribution rather than manufacturing, and US growth continues to pull in more imports than it produces exports, resulting in a growing external deficit – funded in part by the EU current account surplus.
On the EU-15 side, lower growth is reflected in a high and prolonged average rate of unemployment, which has remained about three points above that of the US for some time. Equally, looking at the disaggregated data, some EU-15 countries have done better than others over the past decade in terms of prosperity and unemployment; e.g., the UK, Ireland and the Nordic countries. But these differences exist for quite different reasons and, equally important, we do not normally disaggregate US data to compare growth in (say) North Dakota and California.
Employment and Unemployment
Perhaps the most common argument is that contrasting the job-creating virtues of the US ‘flexible’ labour market with the sclerotic state of the EU, where unemployment is persistently high. Economics students attending US university (and increasingly those in the EU as well) learn that because EU labour is supplied at an artificially high wage rate, equilibrium employment in the EU is lower and unemployment higher.
Now while it is true that the US has a better employment and unemployment record, the key to understanding the difference between the EU and the US lies in disaggregating employment by age group. If we compare employment rates in 2005 of the 25-55 age group, there is virtually no difference; e.g., the employment rates are 86 and 88 percent for the EU-15 and the US respectively (ignoring differences in how the data are recorded). The US data show a higher employment rate for youth (15-24) and a much higher rate for preretirement (55-64) and post retirement (65 and over) groups. What the average employment and unemployment figures hide is the agespecific nature of the ‘European problem’. The picture remains much the same when comparing the US and the EU-25.
Making labour markets ‘more flexible’ (i.e. cutting wages) does not cure these problems...
Once again, the crucial element in understanding these differences is income distribution. At the youth end of the scale, young workers in the US get less education and those who go to university are more likely to work part-time than their European counterparts. At the older end of the scale, pension provision in the US is neither as broad nor as generous as in the EU, so people – particularly the poor who cannot afford to save for retirement – carry on working.
Making labour markets ‘more flexible’ (i.e. cutting wages) does not cure these problems; if anything, it makes the problem worse. By contrast, putting resources into active labour market policies such as improved education, retraining and high benefit provision contingent on job searching helps workers to find and retain high productivity jobs. This is the strategy pursued by the Nordic countries, one which has paid and will continue to pay handsome rewards in terms of prosperity and job security.
Who wins?
Comparing the economic performance of the European Union and the USA does not lead one to conclude that America has the more dynamic economy, or that it has performed better in the past or will do so in future. The most important feature of the comparison is neither the growth nor the unemployment record of the US and the EU. It is, rather, that US growth, unlike that in the EU, is funded by a dangerously high mountain of foreign debt. US external indebtedness, in turn, is driven by the US house-price bubble, enabling US consumers to spend more than they earn. Ironically, it is the EU which, together with China and Japan, continues to lend the money to the US which keeps their households spending and their economy growing.
The truth is that neither side ‘wins’ in this beauty contest. Europe merely does less badly than the USA in some crucial respects. Yes, while it is true that the core Eurozone countries could perform far better, Germany, France and Italy have quite different problems – in comparison both to the US and to each other – which require quite different solutions. Anybody who claims that the US provides a model which the EU should copy needs to consider the basic economic facts of the case.
1. On 16 January 2007 at 15:51, by Thomas Rudolf
Replying to: Europe vs. USA: Whose Economy Wins?
Qu’en est-il du coût du travail français? Laurence Parisot du MEDEF et les marchés financiers râlent, c’est leur métier. Pour se rassurer d’emblée, selon les chiffres du Bureau of Labor Statistics (BLS) américain, malgré les 35 heures, les salariés français restent parmi les plus productifs du monde: un employé français produit en moyenne 72.000 $ de valeur ajoutée par an, contre 64.000 $ pour un Anglais, 59.000 $ pour un allemand ou 56.000 pour un japonais.
Que va privilégier cette Europe ouverte vers ces niveaux de vie si bas des pays entrants? Une rationnalisation - au détriment du salarié, qui doit encore “travailler plus pour gagner plus” - du système de production comme en France ou un dumping social et fiscal qui demande tellement moins d’efforts managériaux et d’investissements pour parvenir au même résultat financier? La marge opérationelle sera tellement plus grande avec des investissements productifs moins élevés. Les pays entrants sont donc l’Eldorado pour le monde des entreprises, comme le seront bientôt la Turquie et l’Ukraine quand l’Europe n’aura plus l’envie de feindre de résister au chantage de la dérive de ces pays vers d’autres obédiences. Bruxelles et ses boys nous vendront ceci comme la modernité incontournable, l’ouverture de l’Europe jusqu’à Incirilik au nom de la croissance et du libre commerce.
L’Europe reproduit sur sa zone de manière plus violente ce qui nous est imposé par l’OMC sans s’armer et s’harmoniser de manière cohérente.
2. On 16 January 2007 at 19:26, by Fabien Cazenave
Replying to: Europe vs. USA: Whose Economy Wins?
Thomas, vos propos me rappellent ceux dont j’ai entendu parler à propos de l’entrée de l’Espagne... qui était à notre frontière ! Pourtant, même s’il existe des pbs (notamment au niveau de la pêche et de l’agriculture), toutes nos entreprises ne sont pas parties en Espagne.
La France a au contraire tout intérêt à avoir accès à d’autres marchés... pour pouvoir renforcer ses propres emplois. Mais si vous préférez rester dans vos chimères de catastrophes...
En revanche, si vous dîtes que nous devrions avoir une Europe politique pour pouvoir avoir une harmonisation qui ne soit pas seulement économique, alors oui. :-p
3. On 16 January 2007 at 21:02, by Thomas Rudolf
Replying to: Europe vs. USA: Whose Economy Wins?
Excusez-moi d’être aussi borné. Je remets ce que j’ai trouvé sur votre site quant au scénario catastrophe:
“En 2004, pour l’entrée des nouveaux Etats membres, l’Angleterre prévoyait une arrivée de 5.000 à 13.000 travailleurs étrangers sur son sol. 600.000 sont venus.”
Suffisamment de journaux sérieux comme le FAZ ou le Monde nous entretenaient au sujet d’entreprises anglaises qui licenciaient même massivement pour réembaucher des ressortissants de l’Est presque le lendemain. C’est tant mieux pour l’Est.
Ce n’est pas des chimères de catastrophe. Nous n’avons pas le droit de nous voiler la face par passion pour l’Europe. Donc une comparaison de productivité des “modèles” US ou EU doit englober tous les facteurs. Ceci la base le sait, le sent et le vit. Elle ne comprend pas la macro-économie comme nous ici.
4. On 16 January 2007 at 21:36, by Fabien Cazenave
Replying to: Europe vs. USA: Whose Economy Wins?
Sauf que vous oubliez de dire une chose Rudolf : tout travailleur doit être employé dans les conditions prévues par la législationa nationale du pays. Par conséquent, si un travailleur polonais ou tchèque ou... français va travailler en Angleterre, il le fera dans les conditions prévues par le Parlement de sa royale Majesté.
La France a d’ailleurs tout intérêt à miser sur la qualification de ses travailleurs puisque c’est cette raison qui fait que tant d’entreprises américaines investissent en France plutôt qu’à l’Est.
Enfin, les chiffres que vous citez doivent être pris en considération avec une autre information : le Royaume-Uni est l’un des rares pays à avoir ouvert ses frontières aussi massivement aux travailleurs de l’Est, ce qui n’est pas le cas de la France.
5. On 7 February 2007 at 08:53, by Commander
Replying to: Europe vs. USA: Whose Economy Wins?
This article brings up many good points, but it goes a bit too far in trying to prove either the US or the EU is better than the other. Each has created the type of economy that fits their values and each could learn a little from the other.
Europeans, generally speaking, are more interested in producing an end result that is close to economic equality or which is economically “fair” to all. Americans, on the other hand, are less interested in ensuring everyone maintains a certain minimum level and are more interested in making sure each individual has a higher opportunity for unlimited success or unlimited failure. Americans value monetary rewards higher, while Europeans value quality of life rewards greater. America is set up to grow richer monetarily, while the EU is set up to grow richer in quality of life.
These are simply two different choices the EU and the USA make. Americans do not want the social welfare state and higher taxes of Europe, while Europeans do not want the higher potential for individual economic failure that is possible in America.
One important factor not mentioned in the article is demographics. America maintains a healthy demographic profile with comfortable birth rates, which implies continued growth, while the EU’s small or negative birth rate foretells slower growth and mounting pressure on government pension programs. Long term forecasts by The Economist and other think tanks agree that demographics alone will mean the US continues its traditional lead in GDP growth versus the EU, such that by 2020 EU per capita share of GDP in the EU will be only half of that in the USA.
6. On 30 March 2007 at 04:35, by J.
Replying to: Europe vs. USA: Whose Economy Wins?
In my experience as having worked on both sides of the Atlantic for 7+ years, my appreciations are that in the US, an individual needs to put away a bigger chunk of his/her paycheck for items covered by European taxes.
Thus, in the end, US worker gets taxed higher than its European counterpart.
Add the costs of healthcare for all your family members. Add the cost of mandatory pension funds (retirement payment by US government is a joke). And add the cost of donations (charity organizations in US must cover for services covered by European government programs), the cost of money for coworker with “long-term sickness”...
This strangles middle-class, kills low-class and only benefits high-class.
This is awful, but, as 40% of US believe they are in top 10% of the economic ladder, this goes on unchallenged.
Peace
7. On 26 May 2007 at 06:16, by Thomas Rudolf
Replying to: Europe vs. USA: Whose Economy Wins?
Ceci est la théorie. La pratique est comme tout être sensé et honnête l’avait prévu en avertissant l’opinion publique.
Exemple: le grand procès entre la Lituanie et le Suède qui a lieu actuellement en mai 2007, et ce n’est que le début d’une très longue série a annoncé la CES, Confédération Européenne des Syndicats
8. On 9 June 2007 at 05:13, by curious American
Replying to: Europe vs. USA: Whose Economy Wins?
I’ve been searching this topic lately. To be honest, it never crossed my mind until an acquaintance was making an argument in favor of a dominating EU economy and a US economy based on fabricated and inflated numbers.
Since the beginning of my search, I have noticed a few ways of categorizing the EU economy. There is EU 15 and EU 25. More interesting to me is Euro zone. Euro zone seems to be a better comparison to the US economy. The populations are similar and they compare single currencies.
Being new to this topic I would like to ask a question that will probably show my ignorance. If we compare the EU economy with a population of about 490 million to the US, should we consider NAFTA as an economy with a population of about 440 million? This is a question I haven’t encountered in my searching.
Any feedback would be appreciated.
9. On 22 March 2008 at 20:04, by ?
Replying to: Europe vs. USA: Whose Economy Wins?
NAFTA is more of an economic alliance/agreement between member countries.
EU on the other hand has a parliament, flag, national anthem, no borders and common currency and will probably end up in a paneuropean supranation.
Comparing NAFTA to EU would be possible if mexico could influence US economic policy (which most americans would consider offensive and would never happen).
Read the CIA factbook entry for the EU for more information.
10. On 10 April 2008 at 13:46, by MCG
Replying to: Europe vs. USA: Whose Economy Wins?
This article was prophetic in talking about the housing bubble and the inflated by debt growth numbers in the USA. The new IMF stats show Europe starting to trash the USA even when it comes to GDP per capita. My country (Netherlands) was just a year ago 2k behind the USA now we are 6K ahead in just as year! Both France and the UK are now projected to overtake the USA (the UK in 09 and France in 2010+) and the former is especially impressive seeing how much hours they spend NOT working compared to the states.
11. On 7 May 2008 at 10:56, by Phille
Replying to: Europe vs. USA: Whose Economy Wins?
The EU is built on a customs union, which implies that all member states have very integrated economies and no import duties are due when shippping between member states. There is free movement of goods, services, persons (for EU-15, later for EU-27) to create one common market (which is not perfect yet). However, besides, this customs union of 27 member states, there is also a free trade zone (comparable to the NAFTA), which includes the EU-27, EFTA countries (Iceland, Switzerland, Norway, Liechtenstein) and the PanEuropean Mediteranean countries like: Morocco, Algeria, Turkey, Libanon, Israel, ...
12. On 13 August 2008 at 02:21, by ?
Replying to: Europe vs. USA: Whose Economy Wins?
This article compared the EU nations to the USA. This response took a single nation within the EU and compared it to the USA as a hole. The US is comprised of many states, as the EU is comprised of many nations. Some states within the USA have stronger or weaker economies, like many Nations within the EU.
Netherlands has a strong GDP, one of the best within the EU, and is very enviable. I think a better comparison for the Netherlands would be a US state with a strong economy. I live in California, which has a much greater GDP per capita then the Netherlands. The California GDP alone would make my state the 7th largest economy in the world, with the greatest GDP per capita in the world.
I wonder haw the GDP of the EU verses the USA would compare, if we dropped the hi and the low Nations and States respectively? California like Netherlands drives the average up, but Georgia like Poland drives the average down.
13. On 9 September 2008 at 04:14, by Cyrano Jones
Replying to: Europe vs. USA: Whose Economy Wins?
I’m not sure Georgia is really the best state to use as a “Brings the average down.”
The fact is, Since this article was written and since the last comment was made, the US housing bubble, about which Europe has groused for 6 months has turned out to be quite bad as a component of the economy, but not a very good reflection of the broad economy.
A previous poster referenced the “mountain” of foreign debt, but Europe has made this assertion to it’s peril. The maintenance on that debt has been being paid for 2 years in tremendously oversold dollars. The fundamentals now are beginning to play out and the resulting decline in value of the Euro has been, quite simply, breathtaking. If anyone in January had suggested we’d be trading a $1.40 Euro by year end, he’d be hauled off for psychiatric evaluation. What a difference a summer makes! Now we’ve experts daring to forecast a $1.20 or cheaper Euro. Bad for the US? Perhaps, but 2 years of interest payments permanently subsidized by the EU and off the books isn’t a terrible consequence given real unemployment hasn’t managed to crest half the average in France.
I suspect the net immigration advantage the US has from not only developing nations but Europe and Canada is no accident and unlikely to change any time soon. Just keep the Netherlands and Finland humming along so I have a nice, cool place to retire ;)
cj
14. On 16 September 2008 at 15:17, by Kev
Replying to: Europe vs. USA: Whose Economy Wins?
This is so strange because the EU is actually richer than the US in real terms and now for the last few months the USA is getting poorer very quickly.
Which is the author said is down to the high risk foreign debt, this debt is about to be called in and combined with America’s downfall with all its major banks and other comanies beginning to fold... it is the European comanies that are benefitting.
In 10 years time, the EU will be well on its way to replacing the USA as a super-power. In fact, before this recession started the EU’s 13.5T Dollars a year was bigger than USA’s 13TDollars. Now with what is going on, the USA will likely slip below 13T Dollars while the poorer states of the EU push the it well over 15T Dollars.
There are always two sides to an argument, but this one has three sides. I had already read the American version which basically calls Europe paupers, I have just read this one which meets half way, and the European version which is actually happening in front of our eyes spells doom for USA.
15. On 11 October 2008 at 07:37, by cololyzt
Replying to: Europe vs. USA: Whose Economy Wins?
In fact, Mexico influences US economy..... the high prices of corn, low prizes of petrol and cheap raw materian and labour has actually influenced US economy, don’t you think Mr?
16. On 11 October 2008 at 23:44, by James
Replying to: Europe vs. USA: Whose Economy Wins?
The UK is currently way ahead of the USA, the EU is too many countries to decide.
UK average wage $43,000, USA average wage $38,000.
Payed holiday...UK 4.8 weeks, USA 0 weeks.
Taxation when health care is taken into account are the same. Although the British pay more for goods and British homes are built to a far higher standard so they cost more.
Homelessness ...UK 487 temporary rough sleepers, 0 long term homeless. USA 1.5 million temporary rough sleepers, 860,000 long term homeless.
Universal health care is a guarantee for all in the UK and the UK has far less people dieing of cancer than the USA, oh and the British live far longer than the USA.
USA gun deaths and rapes are similar to third world countries, the UK has the lowest gun deaths per person in Europe.
However the British weather is not great and the British media is always negative.
17. On 14 October 2008 at 05:29, by ?
Replying to: Europe vs. USA: Whose Economy Wins?
Nominal and PPP for the United States are both at 43 to 44K by the IMF for 2007. Your 38K data is old. Please cite your sources.
18. On 16 November 2008 at 18:42, by André
Replying to: Europe vs. USA: Whose Economy Wins?
James ment average wage, not GDP per capita, these are two different numbers, if you mind. By the way, the Danish average wage are $45k with the current exchange rate. If you look at the exchange rate on the 11th of October, it’s $50k. And I’m quite sure that the dollar will get down there again. Remember, USA owe Europe a lot of money, and that will make the dollar weaker, and the Euro stronger, it will move some currency.
19. On 31 December 2008 at 00:40, by Stormy
Replying to: Europe vs. USA: Whose Economy Wins?
Now you know you are wrong, as the euro was recently up again to 1.47 against the dollar. The dollar is doomed because it is being printed like there’s no tomorrow and your 58 trillions of unfunded debt will let it completely collapse. Too many years living beyond your means with European and Asian money. Time to pay back!!!!
20. On 11 January 2009 at 17:14, by C.
Replying to: Europe vs. USA: Whose Economy Wins?
Yes, but in the UK you make up for gun deaths with knives deaths! Not all that shines is gold.
21. On 1 February 2009 at 07:09, by Bobotox
Replying to: Europe vs. USA: Whose Economy Wins?
C, it is not true that “in the UK you make up for gun deaths with knives (sic) deaths!”. The homicide rate per 100,000 in the US (5.7) is more than 4 times that in England and Wales (1.37).
22. On 11 March 2009 at 21:52, by surfcasual
Replying to: Europe vs. USA: Whose Economy Wins?
what i would like to do is make europe pay for its own national defense and pull all our troops out then see how they handle there economies when the free ride is over.!!
23. On 31 May 2009 at 19:01, by Ethan
Replying to: Europe vs. USA: Whose Economy Wins?
The UK is not really the best example of Europe. That would be the leading nations of Europe: the Scandinavians on top in almost any measure, West Germany, Switzerland, Austria, the Netherlands.
I can’t compare British houses to US standards, but by comparison to Continental standards the British standards are way below. I’ve lived in the UK and am very happy to be back on the continent, a comparably quality of life on the island is just impossible to afford.
Europe is far to diverse to compare to the US. Scandinavia is far ahead of the United States, countries like Spain obviously are not.
24. On 3 June 2009 at 18:11, by taj
Replying to: Europe vs. USA: Whose Economy Wins?
I believe the economy of the USA wins because I am a rich person. I get more income in the USA, pay less taxes, and things are much cheaper. I also get the feeling that things are more luxurious in America. I have walked into some libraries, hospitals, or schools in Europe, and I just get the feeling that they are poor. Looking at the flooring, lighting, doors, toilets, tables, chairs, windows, it is like comparing the Grand Hyatt to Motel 6. Now you may say that only rich people can get to enjoy these things, but libraries, hospitals, and public schools are open to the public. I have gone through poor times in America, having been on Medicaid, and I have noticed that Medicaid is just like private insurance. In fact, it is the govt paying private insurance companies, so you get to use the same doctors and facilities as a rich person would. You go to places like Britain and you got people sharing ownership of a 2 bed room apartment. To me, that was shocking. Just the gas prices of Europe alone is enough to make someone go broke. However, as much money as one is able to make in the USA, and as cheap as everything is, there is a much bigger price to pay, and that price is human rights. Europe has better human rights, and sometimes, one may have to sacrifice income and savings in exchange for human rights.
25. On 3 June 2009 at 18:29, by taj again
Replying to: Europe vs. USA: Whose Economy Wins?
Ok. I also believe that the USA economy is stronger because the shops stay open longer, and there is a bigger range of services that you simply don’t find in Europe (think OC choppers, and Pimp my ride, but there are many others). Look at how everything is closed in Europe after 18:00. In America, you got things open 24-7. You got 24 hr Mcdonalds in the middle of Idaho. In Europe, even in the big cities, Mcdonalds are not 24 hrs. I don’t believe you will find things like Denny’s. The call centres of Europe close much earlier, and many are closed on the weekend. In the USA, you will find much more 24hr call centres. Most places in Europe are closed on Sundays. This was the USA back in the 70s, but now most things are open on Sunday. Now I am starting to get political now, but the USA spends $700 billion pa on military, with over 700 military bases worldwide. You know that will persuade many to do business with the USA. If you’ve got guns pointed at you, how can you say no. In fact, the USA has successfully supported many coups to overthrow govts that were a hindrance to the U.S. market. There is also the issue of brain drain. Many of the best European doctors, accountants, engineers, scientists, etc want to go to the USA because they pay less taxes, and the American system benefits the rich. So what do you have left in Europe? Basically, second tier people. I am not trying to offend Europeans, but at the end of the day, it is money that drives people. Who wins in a situation where the European govt educates its youth (up to masters degree in some countries), so they can move to the USA & make maximum money, pay virtually no taxes, then return to Europe to retire and drain the benefits system. Obviously, Europe loses. I also believe that language is important when it comes to economy. The USA is universally English, whereas Europe has over 20 different languages. This definitely creates barriers of all sorts. How do you expect to get anything done when nobody understands each other?
26. On 4 June 2009 at 13:08, by cekay
Replying to: Europe vs. USA: Whose Economy Wins?
One of the most important things to do for the US is to find out the real GDP considering the public and private debt situation. Anyone has more solid research done on this?
27. On 3 July 2009 at 16:06, by The Dutch guy, living in Sweden, working for an American company!
Replying to: Europe vs. USA: Whose Economy Wins?
In America the goal is to live the “American dream”. Big house, big car, lots of money. Great!
There is no “European dream” and actually I am happy about that. America has paid a dear price for living its dream, with large portions of the population living in poverty.
And agreed we do not have OC choppers, although we do have a European Pimp my Ride. We also have: Ferrari, lamborghini, Bugatti, koenigsegg, Aston Martin, Maybag, Rolls-Royce etc all of which really do not need pimping.
There is also a certain modesty in the European cultures (in some more than others) which for the most part means “no showing off”.
And yes, America has a 24/7 economy, much more than Europe. You also have to work longer hours because of it. It’s a choice, one that you are obviously happy with. I would not be. Besides, in the main cities in Europe the economies are 24/7 as well. You can walk into restaurants in the middle of the night in Rotterdam or Paris (And others) and get served at your table with a nice menu.
When it comes to languages: Most Europeans speak English as well as their native language. In small countries in Europe (less than 20m people) most people understand and speak English well enough to communicate to each other. As a total (including the large countries) almost everybody in a decision making role will master the English language comparable to an American high school student, with a big portion comparable to the US university level.
What I really like about the USA is that all people are united and everybody feels American. There is a growing population in Europe calling themselves European first, before Dutch or German or French. But we still have a long way to go there, before we come close to America. That is a lesson Europe can learn from the USA.
So as a conclusion: If you are happy to be American, be proud of it. If you are happy to be European, be proud of it. Different is not better, it is not worse, it is different.
28. On 6 July 2009 at 11:37, by ?
Replying to: Europe vs. USA: Whose Economy Wins?
I would have to agree that the way the two systems are set up, that the USA will prevail against Europe economically in the short term. The true question that everyone should be asking is not whether the USA will prevail against Europe but whether it will prevail against China.
When comparing the US with Europe you have to understand that the US has the advantage militarily to dictate its economic supremacy. But, if the left wing movement continues to drain the US’s capitalist infrastructure, China will surely outpace us. I believe the US is at the top of the 1st world tier with little further advancement. The US has an easier tendency to move downward economically at this point. China can pretty much only move up.
Europe has only one advantage over the US and that is its ability to spend close to nothing on a military budget because the United States will defend Europe under any opposing threat. Europe’s very existence depends on US supremacy. If the US decides to become a socialist state like Europe or if China calls in our debts, China will be in position to become the next superpower. Evidence of this is the German prime minister being opposed to “Obama spending”. The real question is, does anybody here believe China, with a poor track-record of preserving human rights, will come to defend Europe from the Middle East when the US can no longer financially provide military aid? I think not.
I do believe that the poor and middle class have a much better “quality of life” in Europe than the US but Europeans should remember that it is only through the grace of the US that it is allowed to do so. My mother is French and my father is Italian. I am a first generation “American”. I was raised with the European mentality because of my parents but I understand the “American” way of life because I was born here. I am afraid to say that it is becoming more difficult to “fulfil the American dream” in this day and age. Outsourcing, illegal immigration, and higher taxes are preventing anybody from the bottom of the economic chain to elevate themselves.
29. On 6 July 2009 at 11:51, by georgio_93
Replying to: Europe vs. USA: Whose Economy Wins?
You just don’t get it. We can print our way out of our problems but you can’t because the Euro is backed by absolutely nothing. The US dollar is backed by gold (partially) and the rest backed by oil. The real reason why we invaded Iraq was not because of WMDs or ousting a dictator but securing that the oil will be valued in dollars and not Euro which Saddam wanted to do.
30. On 6 July 2009 at 12:08, by georgio_93
Replying to: Europe vs. USA: Whose Economy Wins?
One important thing that I noticed between the most “economically free countries” compared to the most “socially free countries” and that is the more economically free you are as a country the more socially trapped you are and vice versa. For instance, Hong Kong, Singapore, and Australia, are more economically free than the US but have less social freedoms. The European countries fall well behind the US in terms of economic freedom but their social freedom is much more than the US respectively.
One can make a thesis that social freedom is an illusion to create an economic dictatorship and economic freedom is an illusion to create a social dictatorship. Pretty interesting when you come to think of it.
31. On 13 July 2009 at 20:11, by mark gutowski
Replying to: Europe vs. USA: Whose Economy Wins?
I love the way you had to play with the statistics before you started your comparison. Point well taken, American freedom and choice win again.
32. On 4 September 2009 at 04:47, by mick
Replying to: Europe vs. USA: Whose Economy Wins?
Homelessness …UK 487 temporary rough sleepers, 0 long term homeless. USA 1.5 million temporary rough sleepers, 860,000 long term homeless.
James you’re making these numbers up, surely. 487 rough sleepers and 0 long term homeless in the UK?! And don’t think you can boast about the NHS without anybody else knowing what it’s actually like...
33. On 30 October 2009 at 14:44, by Thomas Rudolf
Replying to: Europe vs. USA: Whose Economy Wins?
Je reviens à vous à la fin de 2009 et je souligne ma clairvoyance que j’ai parfaitement exprimée suite à votre article de janvier 2007.
Ce que vous faisiez passer pour de la “croissance du PIB” était de la croissance de “justes valeurs” dans cadre comptable bien précis. Je n’en étais jamais dupe et je l’enseigne en ces termes depuis 1993.
34. On 19 November 2009 at 11:21, by Alberto, Florida
Replying to: Europe vs. USA: Whose Economy Wins?
So much to say and so little to back it up with. The world economy is the way it is because the U.S defaulted, Japan was hit with a recession, Europe’s unemployment is almost as high as third world countries, and China feared to lose it’s top product buyer (USA) to keep their so called 10% plus a year economy moving up, in the end, it all moves and it will all keep being decided by the U.S economy, and I was born in Spain by the way.
One more thing, there is something 1.5 billion people (China) and the refined europeans can’t produce, and that is ingenuity. Count how many global fortune 1000 companies belong to the U.S, you all use computers go to walmarts and use facebook and blackberries because of american ingenuity and that is and how it shall always be.
(Twitter anybody?) ;)
35. On 23 November 2009 at 22:50, by ?
Replying to: Europe vs. USA: Whose Economy Wins?
So much bravado from my fellow Americans, I wonder if they have ever actually spent any time in Europe except in some fancy hotel?
The real issue is that both societies will decline, if viewed in terms of materialism. With the rise of China, India, and everyone else, all wanting to live at the same standards as Euro/US, it is only a matter of time. If everyone alive today lived an American lifestyle we would need over 10 earths, and the European lifestyle is only marginally more supportable. We are enjoying our last few decades of cheap energy, after which, everything will change. The natural capital stocks that we inherited at dissapearing quickly, just look at the Atlantic Cod and now, almost every popular eating fish. Clean drinking water will become an issue in many places by 2025.
You can print all the money you want, but unless governments/consumers/businesses start focusing on investing in natural stocks and creating a lifestyle that is sustainable, there will be a serious decline in quality of life for the entire “first world.”
36. On 29 January 2010 at 18:54, by Dominique
Replying to: Europe vs. USA: Whose Economy Wins?
This is ridiculous mostly....only one thing is partially credible.
Saddam wanted to switch to the Euro and it wouldn’t have benefited the U.S....However this is not the reason for the U.S Invading.......That is pure speculation.
The U.S dollar is not backed by gold ....it hasn’t been for a long time...it’s a floating currency and is based on speculation/confidence .....The reason that the U.S can keep printing and not induce exorbitant inflation is because it is the worlds’ reserve currency....it will continue to be stored and used.
37. On 29 January 2010 at 18:57, by Dominique
Replying to: Europe vs. USA: Whose Economy Wins?
The U.S didn’t default. U.S debt isn’t due for a few more years yet. but rest of the points taken agreed with
38. On 19 February 2010 at 08:16, by Bastian Schwaztigger
Replying to: Europe vs. USA: Whose Economy Wins?
I think he meant influencing the US economy in the sense of policy-making. Mexico has no say in American politics. However, all members of the Eurozone share power when it comes to making economic policies.
39. On 1 March 2010 at 03:36, by astro
Replying to: Europe vs. USA: Whose Economy Wins?
the majority of top 500 companies in the world are NOT american.
EU’s economy is larger than US, almost as large as US+China together.
And US didn’t even win most gold medals in the winter olympics. Oh, please, don’t let me start comparing the cultural achievements, unless you think hollywood is culture.
40. On 14 March 2010 at 14:18, by regan
Replying to: Europe vs. USA: Whose Economy Wins?
Europe is a long way from being a Superpower as one writer stated. There is several things that have to be accomplished before one is considered to have such a title. First economics. There the EU is doing well, but that is where it ends for the EU. The second is broad Military power. Outside of England and France the European nations are considered extremely weak militarily. Sadly for the proud Europeans, they still rely heavily the USA for it’s defence(which is ironic considering the amount of trash talking you do). I am an American soldier living in Deutschland. The third is Political power. europe still has a way to go in that arena also.
41. On 17 March 2010 at 12:21, by Mikis78
Replying to: Europe vs. USA: Whose Economy Wins?
“Europe has only one advantage over the US and that is its ability to spend close to nothing on a military budget because the United States will defend Europe under any opposing threat. Europe’s very existence depends on US supremacy.”
According to Center for Arms control, US military budget (2008) was about $711 billion (48%). EU military budget (2008) was about $289 billion (20%).
I don’t think $289 billion is “close to nothing” (second biggest in the world), but since Europeans don’t have bases around the world (we use far more economic “soft power” to safeguard our interests) and the cold war is over... we mostly spend on defensive forces only.
US has never really defended Europe as much as it has safeguarded it’s interests elsewhere, around the world. But NATO has - and the backbone of NATO in Europe has always been the Germany. US presence here was (and still is) just about enough to make sure that if ever Soviets/Russians were about to attack Europe, US will get involved.
Both Europe and US has scaled down a lot since the end of the cold war. Nowadays Russia is simply unable to wage war and China really is not our potential enemy either. Terrorism has always been a tough thing to kill with aircraft carriers and nuclear submarines. Our biggest enemies used to be next to us, while US has always been have to sail next to them (that’s very expensive).
European existence hasn’t depended on US supremacy for a long time, if ever (that has been a vicious circle actually, US military-industrial complex making nice money while arming Europe and US... and Soviets desperately trying to keep up with that). “Common European military” has depended on NATO, but NATO can’t do a thing beyond NATO “borders” without US resources, approval or involvement. But that’s about to change with things like EDA, Eurocorps (Rapid Reaction Forces), SitCen etc.
42. On 17 March 2010 at 14:54, by Mikis78
Replying to: Europe vs. USA: Whose Economy Wins?
Matter of opinion. Economic power is obvious. George Bush and Microsoft has been forced to bend over backwards and apologize - several times (US was unable to deal with Microsoft, apparently simple hatred of monopolies is not enough).
Bush is the first US president to witness EU rising. At first conservatives ridiculed the EU, but when EU threatened to mess up with Bush re-election campaign by punishing certain industries in key election states over steel row, the tone got more serious.
A lot has happened during last 20 years. It used to be that US was able to economically punish any European country, but during Iraq war it was absolutely toothless (unless you consider renaming french fries as a punishment) against France (backed by EU).
EU is a huge aid donor. Nowadays every shipment has EU flags all over and a kind of message “remember, you got this shipment from European Union”. Aid has always been an excellent leverage against any receiver.
We use things like International Criminal Court, The Geneva Conventions, subtle and clever diplomacy (Kosovo independence, Aceh peace deal), trade and development aid as our soft power base. EU is so attractive, that countries are waiting to join us, even when they’re fully aware that they’re going to lose at least some of their independence, including their beloved currencies. From American and British conservative perspective, it’s almost like watching lambs jumping off the cliff, without obvious reason. It’s difficult even for Europeans to understand how or why this is happening. How easily we “surrender” to EU. We bombed Serbia just a decade ago, now it is in the waiting room with former enemies... replacing the bullets and tanks with diplomacy.
While single European member states do have battleships all over the world seas, we’re just studying the ways to combine our armies. When it comes to defense, what do you think about bigger number of troops, jet fighters etc compared to US military? We don’t have aircraft carriers as big as yours, but that’s because we’re not have to sail very far. I think “the trash” we’re talking about, is well deserved.
43. On 20 March 2010 at 18:44, by sonyaj
Replying to: Europe vs. USA: Whose Economy Wins?
http://www.opps.se tells the real truth from an american living in europe. If you read on the main page at www.zolaenterprises.com you will see the tax break down on how americans really pay the same amount in taxes & get nothing for it like they do in europe. Truth be known add your social security holdings, federal taxes, state taxes and fica.. you probably really do pay about 30% which is what they pay in most of euorpe for taxes and they get free health care and more.!!! Also no taxes on food and things in europe so the cheaper food is as cheap as it shows on prices with no add on ect!! Myths about europe and truth about american vs eu is on the opps.se site in facts!
44. On 17 April 2010 at 00:30, by Economic Freedom
Replying to: Europe vs. USA: Whose Economy Wins?
“The most important feature of the comparison is neither the growth nor the unemployment record of the US and the EU. It is, rather, that US growth, unlike that in the EU, is funded by a dangerously high mountain of foreign debt.”
Junk economic analysis.
Real economic growth — whether in the EU or the US — has nothing to do with government spending. It is the US government that is incurring all that foreign debt, not the private wealth-producing sector. To be sure, the unbelievably huge amounts of debt the US government is incurring can kill the US economy, but it cannot cause it to grow.
Europe has far higher unemployment than the U.S. and every incentive is given to the unemployed in Europe to remain unemployed; it’s called the European “social safety net.” Europe quite simply subsidizes unemployment, so it pays for many people to remain unemployed (there are many socialists in the US trying to implement the same policy). Additionally, economic drags are put on European businesses (France, for example) in the form of restricting their freedom to fire employees who, in the eyes of the employers, are not adding value. This causes businesses not to hire as many people as they could in the first place (why take a chance on hiring a young person just out of university when he might not work out and you would be stuck with him). There are also burdensome minimum wage laws in Europe that have the effect of adding to unemployment (prior to 1997, Hong Kong, for example, had no minimum wage laws and no coercive union or labor legislation. Result? Zero unemployment.)
The main issue of comparison between the EU and the US is not GDP, even taking into account Purchasing Power Parity. The main issue is that central engine of economic growth — entrepreneurship: innovation, risk-taking with new ideas, new products, new services. None of the top 10 innovative businesses in the world today are European. That’s no coincidence. That’s the expected result of Europe’s welfare state.
Entrepreneurship requires economic freedom in the private sector, and a policy of non-interference on the part of the government. Entrepreneurs (and their investors) must have the right to earn huge profits if their innovation is acceptable to buyers in the market...and everyone else in the market must have the right NOT to subsidize the entrepreneurs (and their investors) if the innovation is unsuccessful and unacceptable to buyers in the market. In other words, entrepreneurs must have the right to earn unusually high profits if they succeed; and they also must solely bear the full cost of their loss if they fail.
45. On 17 April 2010 at 02:46, by Economic Freedom
Replying to: Europe vs. USA: Whose Economy Wins?
There is no “European dream” and actually I am happy about that. America has paid a dear price for living its dream, with large portions of the population living in poverty.
You don’t know what you’re talking about.
One in six Europeans lives below the poverty level. That’s about 17%.
About 13% live below the poverty level in the U.S. There is also more dynamic activity between the different economic categories in the U.S. than in Europe: in the U.S.A. the rich can become poor (or worse...middle class!) and the poor can become rich. What usually happens to the uber-rich in the U.S. is that after the founder dies, the children are unable (or unwilling) to maintain the same pace of entrepreneurship as the parent. To keep profits well above costs requires constant innovation, or constant cost-cutting policies (cutting wages, making a shoddier product, etc.). Eventually, your competition catches up with you: they bid away your workers by offering them higher wages; they copy your innovation and produce it cheaper; etc. What always happens (as in the case of the famous Astor family, for example) is that the family fortune gets more or less used up in lawyer administration costs for maintaining the estate. The big fortunes today in the U.S. are not the Astors, the Morgans, or the Carnegies. They are the fortunes of Bill Gates, Eric Schmidt, and Steve Jobs (to name a few).
Obama and the other socialists now want to change the definition of poverty to mean “relative poverty” not “absolute poverty.” That means that if I have 10 million dollars and you have a billion dollars, I am poor (“relative” to you). The problem with “relative poverty” is that, by definition, there will always be “poor” people: there will always be people who achieve less economic success in life than others. This would create the perfect excuse for central government to practice more redistribution of private property...because what socialism seeks is an unachievable equality of result: everyone must earn the same, get the same education, have precisely the same medical care, etc.
46. On 22 April 2010 at 18:27, by from europa
Replying to: Europe vs. USA: Whose Economy Wins?
mr. taj I must say I don`t understand anything of economy but the thing is that these things are connected also with culture and other things. I feel that you connected things really well, exactly how ...things are. few exceptions aside.
47. On 22 April 2010 at 19:50, by ?
Replying to: Europe vs. USA: Whose Economy Wins?
Good point about general differences in choices between U.S. and Europe. However; it seems quite a stretch to use birth rate as any sort of indicator for economics. It may simply be a ’room to grow’ type of scenario, or social and cultural differences.
48. On 5 September 2010 at 13:26, by DAVE
Replying to: Europe vs. USA: Whose Economy Wins?
The EU is a more modest power , which is kind of attractive to an asian and african. The likelihood of a bubble economy is less in the eu as the goverment simply cant print worthless paper.
AMERICAN 3000SQFT HOMES ARE WORTH LESS THAN 1000SQFT HOMES IN EU BUT ARE PRIMED BY THE BANKS FOR BUBBLE EFFECT E.G A $120000 DOLLAR HOME SOLD TO MUGS IN CALIFORNIA FOR $450000 USING CHEAP MATERIALS PLASTERBOARD.
49. On 2 October 2010 at 13:22, by JJH
Replying to: Europe vs. USA: Whose Economy Wins?
I was interested to read about US inginuity, now I am a big fan of the USA, I love the country and the people, their a bit over the top on occassions but we can all be that. Romantic and whole patrionsm thing is just beyond most europeansas well as the constatnt re writing of history but it make good entertainement - but I still love the USA. But here is the point when you look at the great American technology referred to in a previous note you dont have to scratch to far below the surface to find British, Italian, French, German ingenuity. The American corporate complex built from post war profits have enabled them to commercially exploit new technology, the electroic computer - British, the original IPOD design - British, the WWW - British, Viagra US laboratories in the south of England, satallites A C Clarke - British etc. And well done the USA! your ruthless business approach exploited these ideas and technologies, which you were able to do by being brutal to European allies in making them pay every last penny in Lend Lease - and extracting concessions from European colonial powers when their need was greatest (Bretton Woods). Where would the American space programme be without German scientists, the atomic bomb was led by an American but overwhelmingly British, German , French scientists and apologies for the countless other Europeans such as Marie Currie who contributed to the over all sciences involved. But thank god America was able to provide the nursery for these advances - lets just not get carried away with the American patriatism thing after all what is an American, British, Irish, Italian, Polish etc
50. On 7 November 2010 at 06:28, by Matt
Replying to: Europe vs. USA: Whose Economy Wins?
“The real question is, does anybody here believe China, with a poor track-record of preserving human rights, will come to defend Europe from the Middle East when the US can no longer financially provide military aid?”
What a ridiculous statement. US intervention in the Middle East region has decreased Europe’s security situation, not improved it, and Europeans would probably enjoy better relationships with the Middle East if they reduced their ties with the US ’Defence’ establishment.
Perhaps more importantly, the expansion of NATO has aggravated Russia, Europe’s largest energy supplier (imagine if the EU began harassing and antagonizing Saudi Arabia and Qatar on America’s behalf). Again, this is a problem easily solved by reducing ties with the US military.
Yes, dissolving NATO would probably mean Europeans would have to take charge of (and fund) their own military establishments, and the US would save themselves (more than) a few bucks. However, the EU has always relied on a sizeable ’soft-power’ component to their foreign diplomacy (a friend calls the EU the ’Metrosexual Superpower’) and this image would only be improved if the Transatlantic relationship was down-graded to one of trade and not one dominated by the question of military superiority and organizational hierarchy.
Europe doesn’t need a defender, it needs countries it can enjoy equitable and profitable relationships with.
51. On 7 November 2010 at 07:04, by Matt
Replying to: Europe vs. USA: Whose Economy Wins?
You Americans are far too hung up on military power. The European economic dynamic is one that requires a lot less firepower than the US. Who’s going to invade? China? They’re too busy flogging cheap stuff to EU consumers. Russia? They’re the primary hydrocarbon supplier for Europe (at least Eastern and Central); why would they want to upset that relationship? Americans always seem to believe the Middle East is poised to invade the EU, but again there isn’t much point and the hostile nations of the region are less well-off militarily than Europeans are.
As I’ve stated elsewhere, Europeans rely on a far higher component of ’soft-power’ for their diplomacy and trade. The relationship with Russia, for example, won’t be helped by parking a battery of French-German-British tanks in the Ukraine. Europeans (excluding the French) have few bases around the globe that require a heavily-funded, global-capable military to maintain.
One area I will give you is that Europeans rely heavily on US naval power projection (and increasingly that of other friendly nations such as India, Thailand and Australia) to keep sea-lanes open and pirate-free. However, that then begs the question of why Europeans shouldn’t take advantage of the umbrella of an ally that uses the same maritime routes for trade.
In summary, the nature of modern global conflict is such that sprawling, mechanized military power is becoming less and less relevant relative to diplomacy, trade and energy self-sufficiency in the area of national relations.
52. On 26 November 2010 at 17:17, by Andre
Replying to: Europe vs. USA: Whose Economy Wins?
If I understand it correctly the economic objective of a society is to work less. So when the Americans have to work more to sustain their living standards then it means they are actually in a more difficult situation than Europeans.
Honestly I prefer a rather Swedish model with a German sense of solidity. The US society is fragmented. You see their political inability to adopt a simple national health care system, the direct result of a lack of cohesion in society. We know from the model of Rothchild/Stiglitz that a voluntary health insurance plan doesn’t work because it leads to negative selection.
It is quite typical for an immigrant nation, when you lack social cohesion in society, when you are no natural people but a socially manufactured nation. When your society lacks ethnic cohesion, racial tensions result in a lack of solidarity, the Thoreau dream of the self-sustained individual in his cottage. Without solidarity there is no working social security system and it doesn’t suprise that you have the sharp anti-taxation, anti-government propaganda that would be unthinkable in Europe.
And sure, the US wars, militarism and overblown nationalism are also instruments for the creation of social cohesion in society. From a Straussian view it is even essential to enact these measures.
I once applied for a job at an American NGO and they call it their “benefit package”. Really, they don’t take it for granted that you get health insurance and pensions!! That is the direct result of the lack of solidarity in US society which makes it politically impossible to sign a social contract.
53. On 5 December 2010 at 23:57, by David Weiner
Replying to: Europe vs. USA: Whose Economy Wins?
I know this is an old thread, but it’s fascinating nonetheless. The most interesting thing to me is the (rather embarrassing) fact that most of the European commenters write better English and are more articulate than the American commenters.
I’m an American with dual British citizenship, and I think the US empire is waning. I’m going to move to Europe eventually...
54. On 6 December 2010 at 03:07, by CongoBongo
Replying to: Europe vs. USA: Whose Economy Wins?
Hi Regan,
without meaning to be rude, the EU is a closet superpower. The USA is a clumsy shark so to say, a whole monolithic thing that has extreme power.
The EU on the other hand is a swarm of piranhas, beware if you swim into it... Highly modular, very difficult to catch, but still a swarm with a common goal.
Everyone in this world has to learn an european language if you want to progress, let it be english, spanish, german, etc...
A lot of people in this world recognizes (mostly in secret) that some political systems originating in Europe may have to do something on why Europe is wealthy. Those systems would be republicanism and democracy.
Europe has influenced for the last 1000 years (at least) the world, economically, politically and culturally. Legal systems, communication tools originating and/or adapted by european cultures, like the latin writing system or the roman legislation model and separation of state powers are now universal goods.
Because of two desperate germanic tribes that migrated from somewhere to an island of celts, we’re communicating to each other in a modern version of their language.
Because of some desperate greek tribes that migrated from somewhere to a peninsula located at the south-east of Europe, we have the political system that they named democracy (and by the way, the word idiot).
Because of some desperate italic tribes that migrated from somewhere to a peninsula located at the south of Europe, we have such stuff as a simple comprehensive writing system and a state form that allows the public to have it’s say in state matters, or at least it should.
Last but not least, the richest colonies in the world that are now independent are all offsprings of Europe and europeans.
And what does this has all to do with the price of the tomato? Well, don’t “misunderestimate” the power, determination and adaptation skills of the average european, we may be way more tribal than the average american, but at the end it looks like we all want to build Rome V2.0 over here.
And for the military issues that you mention, I can assure you, that the military political establishment of the USA, DOESN’T want a full fledged armed EU, that would be the end of the USA hegemony.
55. On 11 January 2011 at 12:24, by marín
Replying to: Europe vs. USA: Whose Economy Wins?
What a stupid comment. How about maybe the USA pulls all of its troops, and suits, from Europe and the rest of the World and stop destroying, i mean influincing, every culture in the world like a virus.
56. On 14 January 2011 at 12:09, by acidclarkie
Replying to: Europe vs. USA: Whose Economy Wins?
huh very funny...The reason why usa is a superpower is because of the 2ed world war.if Europe never had this war,and joined together peacefully as they are doing so now,Europe would have by far been the superpower...You have to remember that Europe is the big brother.but don’t worry little brother usa,will look after you.
57. On 1 February 2011 at 18:47, by Joshua Issac
Replying to: Europe vs. USA: Whose Economy Wins?
If you do a province-by-province comparison, the English economy is the largest, and is 70% larger than the second largest one (Californian).
58. On 3 February 2011 at 05:43, by Klaas
Replying to: Europe vs. USA: Whose Economy Wins?
In this discussion people use different approaches to maths and the concept “Europe”. When I speak of Europeans, I generally like to distinguish several different groups. First of all we have the Norhwestern European countries: Norway, Sweden, Denmark, United Kingdom, Germany, the Netherlands, Switzerland, Austria and perhaps Belgium and France. These countries do very well economically speaking and are considered stable. In fact, without these countries there was no Euro. Further, you have the mediterranian countries: Portugal, Spain, Italy. In some respects, France could be part of it. Disregarding the recent Euro crisis in Spain and Portugal, these countries maintain reasonable economic potential. Thus far, there have been few reasons to say the US is far ahead any of these countries. The rest(except some minor exceptions) do a lot worse than the US, speaking in terms of GDP per capita. But should we cut Urkaine, Romania, Bulgaria and Poland(among others) some slack? 20 years ago these countries were as communistic as Stalin himself. We all agree that the Stalinistic approach to communism doesn’t exactly provide the greatest wealth to the greatest number of people. If you calculate unemployments rated of Europe and include Eastern Europe, you’re bound the get a greater number in Europe. It’s just that simple. But if you compare Western Eurpean countries to the US, it’s actually doing not such a good job. I’m personally not in favor o absolute socialism, and I mean not to suggest that the US should copy the EU. I simply hope that finally one day Americans start doing an accurate job when toying around with numbers.
And to our friends on the other side to the Atlantic I say: I thank you dearly for helping to liberate Europe, even though you should have got invlolved earlier, AND you heavily profited off of it. But where I’d be without the Marshall plan, I do not know, therefor I thank you anyway.
O, and try staying out of global politics when it not in the best interest of the largest number of people.
59. On 25 February 2011 at 07:50, by Michell
Replying to: Europe vs. USA: Whose Economy Wins?
From Wikipedia.
The economy of the United States is the world’s largest national economy. Its nominal GDP was estimated to be nearly $14.7 trillion in 2010,[1] approximately a quarter of nominal global GDP.[2][11] Its GDP at purchasing power parity was also the largest in the world, approximately a fifth of global GDP at purchasing power parity.[2] The U.S. economy also maintains a very high level of output per capita. In 2009, it was estimated to have a per capita GDP (PPP) of $46,381, the 6th highest in the world. Historically, the U.S. economy has maintained a stable overall GDP growth rate, a low unemployment rate, and high levels of research and capital investment funded by both national and, because of decreasing saving rates, increasingly by foreign investors. It has been the world’s largest national economy since 1890[12] and remains the world’s largest manufacturer, representing 19% of the world’s manufacturing output. In 2009, consumer spending, coupled with government health care spending constituted 70% of the American economy.[13] About 30% of the entire world’s millionaire population reside in the United States (in 2009).[14] Furthermore, 40% of the world’s billionaires are American.[15] The US is also home to the world’s largest stock exchange, the New York Stock Exchange. It also boasts the world’s largest gold reserves and the world’s largest gold depository, the New York Federal Reserve Bank. The United States is also home to 139 of the world’s 500 largest companies, which is almost twice that of any other country.[16] A large contributor to the country’s success has also been a very strong and stable currency. The US dollar holds about 60% of world reserves, as compared to its top competitor, the euro, which controls about 24%. Since the 1960s, the United States economy absorbed savings from the rest of the world. The phenomenon is subject to discussion among economists. The US is by far the most heavily invested-into country in the world, with foreign investments made in the US measuring almost $2.4 trillion, which is more than twice that of any other country.[17] The US is also by far the largest investor in the world, with US investments in foreign countries totaling over $3.3 trillion, which is almost twice that of any other country
60. On 2 March 2011 at 16:49, by ghoul
Replying to: Europe vs. USA: Whose Economy Wins?
US is in fact the largest economy, but it’s a giant standing on the clay legs. Economy which is funded by debt. The value of assest relative to dollar are next to nothing.
The strenght of the economy is reached through virtually no regulation of economy, by weak work laws for employees and easier concentration of capital into big aggregates. It’s funded by cheap oil which is essential and possible only by mantaining special relations with autocratic regimes like Saudi-Arabia.
Soon or later it will colapse and with it the rest of the world economy. Good riddance I say. This financial and economical system is corrupt to the roof anyway.
61. On 12 April 2011 at 07:31, by Educated Californian
Replying to: Europe vs. USA: Whose Economy Wins?
An interesting look at the Household Savings Rate of USA compared to France or Germany.
62. On 7 May 2011 at 20:41, by Krum
Replying to: Europe vs. USA: Whose Economy Wins?
I am a Bulgarian, live and work in the U.S. for over 10 years now, and my experience and views leads me to side more with my European counterparts when it comes to the compared economics and politics between the U.S. and the E.U. I do agree with a few of the earlier posters who said it boils down to values and the difference in attitude, however if we are discussing what is the recipe for long term world success we cannot just accept that different societies are different and potentially let one fail because of inadequate ideology. We should certainly continue the discussion as people are doing here and maybe help some to see a different perspective and thus make some kind of a positive difference. What the U.S. seems to have as their biggest argument for power is the topic of military. This is one of the many Boogey Men the U.S. government is so good at creating. The defense from mythical powers that justifies the spending on “defense” and unifies Americans under the pretext of misunderstood patriotism. Don’t get me wrong - I love America and living here for many reasons and I certainly believe that most Americans have their hearts in the right place, however I believe many of them can be misinformed and therefore mislead by propaganda, issued and serving the agendas of special interests groups.
63. On 7 December 2011 at 11:27, by Duke
Replying to: Europe vs. USA: Whose Economy Wins?
In response to: 10 April 2008 13:46, by MCG (and ignoring all the other comments, because it’s just too much to respond to)
“The new IMF stats show Europe starting to trash the USA even when it comes to GDP per capita. [The Netherlands] was 2k behind the USA [and is now] 6K ahead in just a year! Both France and the UK are now projected to overtake the USA (the UK in 09 and France in 2010+) and the former is especially impressive seeing how much hours they spend NOT working compared to the states.”
Brief updates since then - According to IMF (PPP) GDP Per Capita, the USA is $5887 ahead of the Netherlands, $11081 ahead of the UK, and $12950 ahead of France.
America, hell yeah.
Really though, it’s time you realized that even if you think Ohhhh we’re better off than them, if our economy or debt bubble collapses ... well, you’re coming down with us. The WORLD will come down with us. Don’t forget it. We’re in this as a species, now, not by national or economics borders.
64. On 23 June 2012 at 01:14, by JOE
Replying to: Europe vs. USA: Whose Economy Wins?
Just wanted to comment a bit...the great ill for both Europe and the U.S. is that they are linked by the World Trade Organization, since the World is financially uniting money can be made very fast and money can be lost very fast as well.
We are currently feeling the effects of the U.S. housing market, the bubble burst and the effect (thanks to the World Trade Organization) effected all countries involved with that organization, recession in the U.S. (or Depression), so goes Europe and all the G-20 players
People, I give you a warning, if the U.S. economy due to debt falls apart the rest of the world will go with us...The Europeans (thanks to the Germans) will be in the best position as they are developing safe guards and dealing with it the right way...but the U.S. and our love for Deregulation will be our undoing, with us goes the western hemisphere, then Asia, yes Asia. China will fall apart because the U.S. money will dry up and therefore their manufacturing sector will collapse thus hurting their revenue...but the biggest loss will be their holdings...they hold/own the majority of U.S. debt...they will fall with us.
With the 2 largest economies in the world collapsing Japan who trades heavily with both parties will also collapse as their economy is vulnerable...India never really got of the ground, so they will fade.
Russia should do okay due to its natural resources but with no one to buy i see them being hit but not nearly as severe as the 4 above.
That leaves Europe...sadly, the English and their unwillingness to join the Euro will cost them...they will be hit harder than anyone as their economy is very vulnerable. The Europeans and their safety net will in turn survive but due to the economic weaknesses of the other nations and the WTO they will also slide but not nearly as much (30%) Yes, it will be that severe.
What is coming is a depression like none before, the depression of the 20th century was lighter, this depression will change everything and will cause widescale stress, corruption and turmoil.
What is sad is that the poor who are always ignored will still be ignored but the middle class will be the new poor...ignored with little to no rights and heavily in debt...
I am giving you a warning, nothing we do can help us unless you are super-wealthy...if so you can withstand this storm, but most of us aren’t wealthy.
65. On 23 July 2013 at 15:00, by Nevz
Replying to: Europe vs. USA: Whose Economy Wins?
The big difference in our crisis is the way that the two giants approach it. While the U.S. is just pushing the balcony of its dept. The European Union (especially the germans) are pushing one another to stop this. The germans are trying to make the union more stable and lets face it. They were the only nation that was hardly afflicted by the crisis. I am confindent that the EU crisis will take far longer than the US one, but it will create a more stable platform for the future. When the U.S. has to face the facts, it will be a long and sour taste for the Americans.
66. On 10 June 2014 at 16:40, by MUNIR KHORAKIWALA
Replying to: Europe vs. USA: Whose Economy Wins?
EXCELLENT OUTPUT & GREAT FEEDBACK
67. On 4 September 2014 at 16:38, by Karl
Replying to: Europe vs. USA: Whose Economy Wins?
Interesting topic and posts. I always enjoy the condescension of Europeans. Lest our European “allies” forget, a lot of the US debt acquired consistents of shouldering 75% of the NATO budget. You know, the “alliance” that has allowed you to build your continental utopia. You can continue to believe that “Russia will never invade” nations such as Germany, France, etc. and live in your fantasy utopia. Naive at best. As history proves, bullies only understand force, and your defense forces are a joke. No wonder Putin invades Ukraine with impunity. Not in our backyard, but yours.
For may part, as an American, I would agree that we should withdraw from Europe (as you seem to want) and let you fend for yourselves...like you did in 1914 and 1939. Oh wait. My bad. We’ve shed enough of our blood and tax money protecting you since World War II. Grow up and fend for yourselves. While you talk (and regulate) everything to death in Brussels/Strasbourg, we’ll continue to act. Empire? Probably. Decline? That’s been a topic since the 1940’s. I’ll take my chances on this side of the pond. Good luck with your utopia, comrades.
68. On 15 March 2015 at 00:58, by Danny
Replying to: Europe vs. USA: Whose Economy Wins?
EU’s economy is larger than US, almost as large as US+China together. That’s insane...
US GDP : 17T usd China GDP: 10T usd EU 16.6T USD
Combined for what ?
Follow the comments:
|
