Thursday, February 16, 2006

America the Beautiful




United States

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European Union

Starbucks buddy Melanie let me borrow her copy of The World in 2006 published by The Economist Magazine. Said Mel: Go forth and Blog!

The article about Europe begins this way: The existential angst that has gripped the European Union ever since French and Dutch voters roundly rejected its draft constitution in mid-2005 will continue, unresolved, through 2006.

"Existential angst" --- concern for one's existence --- perhaps not surprising now that the European birth rate has fallen below the replacement rate of 2.1 children per woman. But being an Economics magazine, the angst is mostly generated by financial matters.

The figure above shows the record of economic growth for the Euro Area compared to the US over the last decade, and projected for 2006. For the last ten years the EURO growth of GDP has averaged 2% per year, while the US average was 3.34% per year. The magic of compound growth exaggerates this difference: the total European GDP grew 21.6% over the decade while the US GDP grew 38.8%. And if the growth rates persist for another decade the US GDP will have grown 93% during the 20 years while the European growth will be only 48%. The trans-Atlantic gap continues to widen.

The US economy has performed much better than Europe's and is expected to do so for the foreseeable future.


The gap widens even further when one looks at personal finances and cost of living. The following table gives the projected 2006 GDP in US $billions, the GDP per person (GDPpp) and the GDP per person at purchasing power parity with the US(GDPpp/ppp) which accounts for cost of living differences.

Country ----- GDP ------------ GDPpp ----- GDPpp/ppp

France ------ $2,280B -------- $37,500 ------- $32,700

Germany ---- $3,000B -------- $36,300 ------- $30,600

Italy --------- $1,780B -------- $30,600 ------- $28,900

Spain -------- $1,210B -------- $27,800 ------- $27,800

Britain ------- $2,340B -------- $38,900 ------- $34,000

USA -------- $13,180B ------- $44,200 ------ $44,200

Japan -------- $4,960B ------- $38,900 -------- $32,800

Note that the United States GDPpp/ppp is 44% higher than the average of the largest European countries and 35% higher than Japan's.

Beautiful country, America!

3 Comments:

Blogger Shane Borgess said...

Great information for those of us deal with Europhiles who insist America is living on borrowed time. I remember all the gloating about how the European Union was going to rival the US, turning the tables on us, relegating this country to the status it had before WW1. It looks like Europeans will have to keep dreaming....

Again, thanks for the powerful illustration!

12:49 PM  
Anonymous Anonymous said...

AMEN!! I am reminded, however of a line attributed to Benjamin Franklin, who after leaving the Constitutional Convention was asked by a woman, "What have you given us, Mr. Franklin?" To which he replied, "A Republic, if you can keep it."

I know I'm preaching to the choir, but my point is that if liberals and liberal democrats have their way America won't be beautiful for long; we'll be mired in the same socialist crap - forgive my french - that the EU countries are.

Col. Dave

2:10 PM  
Anonymous Anonymous said...

Interesting! The Economist is one of the few magazines I read consistently.

Hope you are doing well.

Linda

10:59 AM  

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