The US economy and the EU were the same size in 2008, the US is now nearly 2X
twitter.com
twitter.com
US grew from $14.8T to $25.5T
EU grew from $14.3T to $24.3T
What that means is that the prices of goods are inflated in the US compared to similar goods in the EU. That's all.
Want something interesting? Look at China who grew from $10.0T to $30.3T over the same period (!)
Sources: https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locat... https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locat... https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locat...
When I said "Twitter is terrible when it comes to cherry picking stats out of context", I was referring to the fact that the Tweet doesn't link to its source, and that it only shows 2 years (instead of a line chart which would show all the years in between). It also doesn't make any attempt to interpret the data (e.g. why or what it means).
I view the parent comment as adding context. They linked to the source of their data and also included their interpretation - which other people can then agree or disagree with instead of having to guess what they meant. So yes I think this is a much more constructive post than the original tweet.
Note: I now see that they linked to the source WSJ article beneath the original tweet, but that was not clear to me when I made my earlier comment (and I see other people on Twitter asking about the source so it's not just me who missed it). I still think that twitter in an inferior platform for discussing nuanced topics like economics than, say, HN.
PPP isn’t a good measure for population’s wealth or quality of life especially for developed economies either.
The economy of the US is still twice that of the EU and its global purchasing power has also pretty much doubled.
To me, economy isn’t an abstract thing to be measured without taking people’s quality of life into perspective. That just feels too much like stats for the sake of stats.
The PPP based measurement is way more interesting.
It has limited applications for developing economies and measuring AIC which it was initially conceived.
Here is a good breakdown of what it is, how it’s constructed and more importantly what it can and cannot measure.
https://www.oecd.org/sdd/prices-ppp/purchasingpowerparities-...
Regardless of how you slice it the national purchasing power of the US has doubled since 2008 whilst the EU’s has stagnated.
Not yet, anyway.
Canada and France have better QoL than Guyana at similar PPP GDP because of more equal distribution. They also happen to have higher non-PPP GDP but it's unrelated - it's accidental that in this case PPP normalization modifies the PPP GDP comparison to correlate less with QoL difference.
[ X ] Doubt
Still, if PPP GDP increases, with all else being equal (eg. stable population) it would imply the standard of living is increasing.
That is why PPP GDP captures a more accurate measure of the real world.
Said another way, what truly matters isn't "GDP growth", but changes in purchasing power/quality of life.
It has zero account for quality or outcomes.
It doesn’t care if you have access to healthy foods, it just cares how much would X calories costs, it doesn’t care what is the quality of the housing stock or the outcomes of your healthcare system.
You can very much have a situation where your economy shrinks, the quality of life tanks and your GDP PPP stays the same or grows, communism is rather good example of just how a situation can be where things are on paper very cheap from food to infrastructure mega projects and where housing is free but no one would claim that life in 1970’s Soviet Union was particularly great.
In 1990 the USSR had the 2nd highest GDP PPP in the world, if you honestly think that it was a good place to live I’ll build you a time machine myself.
That still isn’t the point, the quality of life in the USSR wasn’t a close 2nd to the US in fact when the USSR economy started to fall apart in the late 70’s and 80’s it too switched to PPP because hey our bread is cheap even if you need to stand in line to get it.
And Guyana today isn’t a better place to live in than France or Canada, and Bulgaria is definitely a 1000 times better place to live in than Russia.
There's a YouTube channel where an interviewer talks to people in various Russian cities today about the war and other topics. Loads of middle-aged and older women and men (esp. women it seems) say they want the Soviet Union back.
Your family was one of the malcontents that left. The people still there really do miss the authoritarian Soviet Union and want it back, and they fully support any warmongering necessary to achieve that goal.
Because they have no marketable skills in the current economy. During soviet times they were basically state parasites, paid to sit around and do nothing, or pretend to work in some unproductive factory, and got free housing from the state without worrying about paying for electricity or heating as the state took care fo that too.
Now that they actually need to work to support themselves they find out capitalism works for those with actual productive skills not for those who are good at pretending to work or used to work as informants to the secret police for a living.
The sudden switch from communism to capitalism without a proper long term plan to reintegrate those people into the workforce really shocked them.
Your problem isn’t with PPP but with the Soviet societal tendency to falsify reports on absolutely every level and with the inherent incomparability between planned and market economies.
In USA, GDP includes the explosion of numbers of hospital admin staffers, energy prices doubled, and production of munitions which are given to Europe. That GDP does not increase my quality of life.
I agree. As I said in my first post: "prices of goods [eg. healthcare] are inflated in the US compared to similar goods in the EU". So concretely, if healthcare prices increase in the US, but remain constant in the EU, this would increase the PPP GDP of the EU.
What I meant to write is: if the PPP GDP increases in the EU faster than in the US, with all else being equal (eg. stable population) it would imply the standard of living is increasing faster in the EU than in the US.
> What I meant to write is: if the PPP GDP increases in the EU faster than in the US, with all else being equal (eg. stable population) it would imply the standard of living is increasing faster in the EU than in the US.
No it doesn’t mean anything of the sort in fact high nominal GDP to GDP PPP ratio usually indicates a low standard of living and a developing economy the Eurozone is an anomaly in this regard mainly due to its developed infrastructure and social institutions.
And don’t forget that your GDP PPP can be twice that another county whilst your median income is can be 10 times lower.
Median income per capita adjusted for PPP would be a better albeit an imperfect measurement of it since the standard of living is dependent on so many other things.
In which case there are only 4 countries which have higher median income PPP than the US, UAE, Luxembourg, Switzerland and Norway.
AIC/household final consumption expenditure is another good indicator for standard of living and wealth in which case the US is #1.
For a tiny banking nation or petrostate to be rich is unsurprising.
But when it's half a continent, the world really ought to take out their notebooks and go into full copycat mode - at least as far as economic policy and attitudes are concerned.
> As luck would have it, the US achieved that right after conquering Iraq
Yes? A whole of of things happened back. I’m really not sure what are you implying here? Did they secretly ship Iraqi oil to the US and pretend it was extracted there?
> What petrostate should we liberate to becone self-sufficient
Uhm.. Libya? Or did everyone already forget that?
Yes, of oil and gas, and they're not producing as much as they could, for environmental reasons. They're holding off on production.
> And I think they're quite environmentally conscious.
They are, they could produce more.
Similar story for the UK and the Netherlands with North Sea gas.
> Also isn't Germany burning coal at record rates right now?
Not record rates, standard rates and declining very slowly (2023 is actually better than 2022, shown here):
https://en.wikipedia.org/wiki/Electricity_sector_in_Germany#...
They did mess up the transition with the early decommissioning of nuclear power plants, corruption is probably to blame.
That being said, the policy of austerity implemented during the Euro crisis was pretty catastrophic and arrested growth prospects for a whole generation.
It was an austerity policy in name only given government debts have only continued to increase since then. There's a demonstrated correlation between high government debt and lower growth.
Folks, please leave your notebook in your bag and search elsewhere for a role model.
There’s plenty that’s wrong with America, but there’s no other country within the same order of magnitude of scale (or, hell, expand that to either a population of 50+ million or an order of magnitude greater, even) that has long term prospects as promising as the United States.
China’s on the verge of demographic collapse. Europe, as much as I love to visit and would probably enjoy living there, is more or less the definition of sclerotic. Every other country that excels at both human and economic development is too small to move the needle. Yet the United States remains, overall, a pretty darn good place to live and a magnet for talent and capital all over the world (to say nothing of its own beyond-bountiful resources).
Just off the top of my head, I guess my short list would look something like this. I grant some, maybe all, of these have drawbacks, but these are the factors that I personally value and what I would miss by moving to any of the other places I’ve visited or of which I’m aware that seem like delightful places to live. 1. The sheer number of incredibly unique large cities (and the correlating lack of a single city that dominates national culture)
2. The ethos of individualism
3. The national park system
4. The sheer amount of diversity (racial, ethnic, national origin, religious, regional, etc.)
5. My personal access to, and quality of, healthcare (I grant that this is highly, highly subjective)
6. Other Americans (believe it or not lol)
7. Higher educational system
8. Economic dynamism and opportunity
9. Our foundational documents and subsequent amendments/improvements thereto
10. Our national tendency to do the right thing (after, of course, exhausting all other courses of action)
11. Approximately 10 trillion different regional cuisines (have you seen the number of strongly held opinions about different ways to smoke and serve meat?)
12. Every type of natural beauty imaginable
Not saying we have a monopoly on any of these! But I like where I live and think it’s a pretty cool place.
Unless you have studies to back this up, I'd drop the waiting time argument.
Anecdotally I have to await much longer than my colleagues in the US (same field, same company) to see a specialist (months vs weeks). Also, the my public insurance doesn't cover my physiotherapy for my back pain, while the insurance my US colleagues get through their employer does.
>Unless you have studies to back this up, I'd drop the waiting time argument.
Maybe you should drop it until you can provide any kind of argument or evidence, because you wrote some words but said nothing of value.
Neither have you.
My anecdotes contradict yours.
I'll just drop this since I've seen your other comment about inequality where I literally provided numbers and you disagreed without providing any counter-data.
Let's call this a day and move on.
Which anecdotes? You haven't even provided anecdote just baseless disagreement statements lol.
Might as well just plug your ears with your fingers and yell "lalalala I can't hear you lalalala" or just fart and call that an argument.
BTW, i did provide a source in the inequality comment. Check again.
Also how else do you want to measure waiting times in my country vs the US except comparing my experiences with the people I know living there on similar jobs? It's not like my government made statistics against the US health system to compare so comparing with my work colleagues from the US is the best I can do. You're just being contrarian for the sake of trolling.
Please provide some information if you disagree ,even anecdotes, because otherwise you're wasting everyone's time or you enjoy trolling.
https://wisevoter.com/country-rankings/healthcare-wait-times...
https://www.oecd-ilibrary.org/sites/242e3c8c-en/1/3/2/index....
Let's not glamorize the American system just because the European system is struggling in its own way.
> For years, economists have defined the economic health of a country by its gross domestic product. Trouble is, every time a forest falls, the GDP goes up. With every oil spill, the GDP goes up. Every time a cancer patient is diagnosed, the GDP goes up. Is this how we measure economic progress? Economists must learn to subtract.
https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window
This isn't totally farfetched: in some countries if you own your house you pay tax on the rent you would have paid to yourself [0]. Taxing someone for feeding or educating himself seems like a small and natural next step.
"Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter with a half-million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people.... This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron."
https://en.m.wikipedia.org/wiki/Chance_for_Peace_speech#The_...
Complaining about this fact is as productive as complainig about gravity: if only we could float around effortlessly, imagine how much we would save on bridges and roads and fuel!
It can still be argued that it's worth the expenditure. But the cost should be weighted against the alternatives. Neither Russia or China can be said to threaten the US with their military, except with nuclear weapons, but no defence budget protects against those.
Also, the US Navy protects vital global sea lanes that benefit US trade.
Also:
> Neither Russia or China can be said to threaten the US with their military
China is arming up at a huge pace, even outside of nukes.
No one suggested that it isn't beneficial.
What I said is that the benefit has to be weighted against the alternative benefits.
> China is arming up at a huge pace, even outside of nukes.
I'd argue that one large reason they're doing so is the threat they perceive themselves to be under from the large US military.
Don't fall into that trap.
That sounds like a difficult position to maintain...
Are you from China?
They don't have a real need for a bigger army, they could for sure defend themselves against any neighbor, even India and Russia, with "just" the military from 20 years ago.
what?!? what do missile defense systems do then? nothing?
An article I picked at random:
https://breakingdefense.com/2022/02/no-us-missile-defense-sy...
To strive for peace is not near sighted, it is the only way forward.
You can’t prove that regional conflicts would erupt should the US become more isolationist but any history book should quickly show you human’s propensity for war.
It also turns out that human’s tend not to outright attack foes that will immediately decimate them.
The USAF is the greatest stabilizer this world has as far as I can tell, missteps and outright awful moves like Iraq taken into account in this calculation.
Both the US and Russia have used their weapons to decimate other economies. It is very hard for us to prove or disprove your point.
Americans don't even know what genuine "national defense" feels like. Instead, we have a world-class propaganda complex dedicated to rationalizing our unnecessary overseas military adventures and proxy wars.
The idea that blowing up a government or tribe in Africa or Asia to open up resource extraction (natural or financial) for a Western MNC will benefit the "freedom" of the average American is totally absurd.
I think it glosses over too much complexity to simply state that, because part (not all! Geography is the other part) of the reason why we are so secure is that people know that we have that strong military. If the US were known as a soft target, who had neither the will nor the means to defend itself, we would probably see other actors much more willing to do things to us, such as piracy, etc.
There's an in-between the US and Somalia when it comes to control of territory.
We spend far more than we need to, and Eisenhower is 100% correct in the things we are giving up when we overspend on military.
I'm curious what you know about Eisenhower and his career — it's hard to imagine anyone in the past century whose background and experience made him less myopic than he.
Do you think that Eisenhower, a professional soldier and 5 star general, doesn't understand that? You're not understanding / misrepresenting what he is saying in that quote. It's about the cost of a military and how it has to be balanced against the productive and social needs of a country. A country that is grossly over-spending on the military, as Eisenhower perceived it already back then, and particularly in the case of the US, when that military is used for force and power projection, not defence, is strangling the society that it pretends to protect. This has been the history of the US over at least the last 50 years (when Eisenhower made this fore-warning speech).
But that, while possibly more important than what I'm about to say, is not what I really did want to say. Which is --)
Eisenhower uses a phrase of considerable rhetorical power here --
> those who hunger and are not fed, those who are cold and are not clothed.
-- because he is essentially quoting the Beatitudes, and anyone who is familiar with them will fill in the rest.
Slightly less powerful to me (because it seems to equally reference William Jennings Bryan), but still very strong is
> humanity hanging from a cross of iron.
which is again extremely Christian imagery.
I'm not sure these phrases resonate so strongly with people today, but in those days they went straight to the heart of the question: What is it that is good?
I also really like the sentence,
> This is not a way of life at all, in any true sense.
because it focuses on the dichotomy of life vs. death, which again I think is very important. One could go in very positive green directions also from here. Some adjacent words would be: flourishing, abundant, fertile, growing. Frankly pagan things.
And, things that our economic metrics again tend to discount.
Yes, obviously so! Diagnosing cancer early is one of the best ways to save someone from it. The cancer is there anyway, it's a natural occurrence. The economic activity that leads to and follows a cancer diagnosis is what economists call wealth: the things we do for each other than make each side mutually better off.
All the examples are like that. Nobody wants oil to spill, but accidents are a fact of life. The GDP created by mopping it up on the other hand leads to a cleaner environment, which is another form of wealth.
> smoothly transporting oil without incident makes less GDP than spilling it.
Oil creates huge economic activity when used. It does no good spread over the ocean. The cleanup generates activity, but it's clearly far better for GDP to smoothly transport oil around than constantly lose it, if only because ships constantly sinking would cause people to transport things way less and so markets would be less efficient, yielding less wealth.
I'm surprised at the number of people who are confidently arguing against mrb - they're exactly correct here. The point of PPP adjustments is to factor out the effect of having a strong currency, and the USD's status as reserve currency is exactly why the US GDP has been overtaking the EU. Adjust for what a dollar actually buys you domestically and the picture is far more muddled.
USD was the reserve currency in the 90s and mid 2000s. Back then the Euro was very strong and some large European countries were close to overtaking US in GDP per capita.
The last 10 years have more or less been a lost decade in most of Western Europe because (amongst other things) it almost entirely missed out on the tech boom.
It sure as hell does for the millions employed thereby, as well as those who catch their spending.
- In general, GDP PPP per capita correlates pretty well with quality-of-life.
- In the case of US versus EU, it doesn't for this precise reason.
The amount of GDP I need to be happy is decent food, housing, education, basic entertainment (e.g. a nice park with a free concert, or a pleasant beach), and medical.
I get all of those in the (lower-income) EU country I normally visit, cheaply, and without much stress. $10k / year provides an adequate quality-of-life. That's not hard to make there, so people pick the careers they want. In the (high cost-of-living) area I spend time in the US, one needs around $150-200k / year to be stress-free. People do work like programming, biotech, law, finance, etc. to make it here.
Are you, like, talking about the cost of a gallon of gas or something? Because I can cherry pick whatever numbers you like to craft a reductive substance-free assertion about the state of the US energy production and distribution system.
No argument on the hospital admins, tho (although it’s nice to have at least one in your social circle, so they can get you in with the top tier actual practitioners).
Furthermore, economic growth is measured in "real" dollars, aka, excludig inflation. If US prices doubled as you say, then their economy is therefore now four times as large in the new, inflated dollars.
None of this has anything to do with fiat currency. The same would be true if you measured in kg's of gold, but you'd have to account for the gold-cost of living ratio instead of fiat dollar inflation.
Using the World Bank's figures in 2015-dollars https://data.worldbank.org/indicator/NY.GDP.MKTP.KD?location...
GDP 2008 US: 16.38T EU: 13.19T US/EU: 1.24
GDP 2022 US: 20.95T EU: 15.21T US/EU: 1.38 (2023 not yet available)
Ratio of ratios: 1.11, so the US has increased its lead by about 11%, which is not nothing, but also less dramatic than it looks to me in the "current prices" chart.
Sometimes lying with numbers is way, way to easy...
American housing is built the way it is not due to extra interest in safety, but because it's cheap to build under US prices. You can call it better or worse than Europe, but it sure isn't earthquakes.
Wood buildings can last hundreds of years but require far more upkeep.
HVAC also can generally also be run under floors (and outside of the USA forced air systems are pretty unusual so you're only dealing with pipes).
This was the case but it's not really true any more. Building codes have become more stringent and risk specific. This hasn't changed anything around earthquakes though as as building a single story wood building that stands up to an earthquake is easy, building one that withstands a hurricane is harder.
Sorry to put it this way, but is this a joke? I do live in Bucharest, in Eastern Europe, on the 8th floor of an apartments building built in the early 1980s, and I sure do hope that this building can withstand a Magnitude 8 earthquake seeing that we've had a 7.5 earthquake back in 1977 and a 7.7 one back in 1940 (and a 7.1 earthquake back in 1986, which I do remember).
When the huge construction boom began in Cluj in the first decade of the new millennium, the common opinion seemed to be that the old, ugly socialist-era blocks would survive an earthquake just fine, but people were less confident about the new buildings that private developers were constructing.
This is how modern European brick houses are built:
https://stock.adobe.com/de/images/unfinished-brick-house-sti...
You're looking for "discretionary income" minus groceries (not to be confused with disposable income), because GDP does not tell you that (PPP adjusted or not) and PPP adjusted income doesn't tell you that either. Also you kind of made a jump from (per capita) GDP to income, which is related, but not the same thing.
To answer your question: In your example it may either be more or less, because PPP really does not say much for anything but your chosen basket of goods.
Example: Person A earns $2000 and spends $750 to meet standard of living X, while another person B also earns $2000 but has to spend $1500 to meet that same standard.
Adjusted for PPP using that standard of living/basket of goods X, Person A earns twice as much.
Let's assume that MacBooks and trips to Korea generally cost the same for both people. Person B has $500 left over to pay for such things, while Person A has $1250 left - more than twice!
I easily could have chosen numbers such that it was less than twice. I could also have chosen them such that one person, while appearing richer purely based on non-adjusted income, can in fact afford less of everything. Obviously you can also make it so that one person can afford less luxuries than the other despite appearing richer adjusted for PPP.
You can try to fix this by making any luxuries you're interested in part of your basket of goods. While you're still comparing an entire basket, at least you'll know how often each person could purchase that entire basket compared to each other.
The point I'm trying to make is that while you still have to be careful to understand what PPP adjusted numbers are telling you, non-adjusted numbers aren't any better and in fact are probably more misleading for what you appear to be interested in.
PPP is weird. Many of my costs were higher when living in China since imported things were more expensive, and there were lots of extra taxes to consider. It didn’t feel like I had more PPP except when eating out and consuming services. You definitely can’t use PPP to buy imports.
If you are used to the lifestyle of the western upper middle class and consume the associated products, the effects of the PPP adjustment will not be that meaningful to you. The same isn’t true for people who have to use most of their income to buy basic necessities like shelter, food, transportation and so forth.
PPP is also a deeply flawed concept because comparing the quality of goods and services in the context of different consumption patterns. However if you really want to use you should look at median income (with social transfers etc.) rather than GDP.
For instance, a country that accepts more lower-skilled immigrants will see its median income figures grow less than countries that accept fewer of those immigrants. Is the immigrant-accepting country poorer as a result?
The only way that median income would be a valid measure of wealth or QoL would be if you isolated the cohort of those considered "median" in 2008 and tracked their wealth over time.
> Is the immigrant-accepting country poorer as a result?
Yes, in this specific case it would be poorer per capita.
With some important caveats:
1. Balance of trade. The goods and services in the poorer nation are worth less, comparatively. Any trade with the richer nation will lead to a wider balance of trade deficit. This causes all kinds of structural economic and budget problems in the long term.
2. Foreign purchasing power. Customers have to substitute goods and services away from the richer nation to poorer nations. If one’s preferred television, for example, is produced in the richer nation, these will become more expensive, and will force consumers to purchase other options. This is especially acute in cases where a nation has a de facto monopoly on certain industries.
In reality, both nominal and PPP GDP figures are important to monitor for different reasons.
That's not necessarily true, depending on how the PPP is calculated it may not reflect the cost of imported food or energy or other necessities.
Cheap imports are great for consumers, but a currency losing 20% certainly doesn't mean its economy has magically contracted 20%. If anything a weakish currency stimulates internal economic activity as it's good for exports.
The US economy is also not nearly "twice that of the EU", in nominal terms either - it's about 50% bigger. The (silly) chart is for the eurozone.
Seriously, the US always had a somewhat bigger/stronger economy, but a cheap dollar at the time made nominal almost equal, which was misleading. Now, the US still has a slightly bigger economy, and has had better growth, while the price of the dollar makes it look like a massive difference, which is also misleading. The true output difference is high single digit. Why are you pretending otherwise?
https://www.oecd.org/sdd/prices-ppp/purchasingpowerparities-...
Also GDP, GDP PPP and every other economic benchmark is calculated using CID - constant US dollar; specifically to avoid skewing results due to fluctuating exchange rates.
> This swing is the main driver of this whole thing and means that yes, PPP is superior for looking at growth.
It is technically incorrect on every level. As GDP PPP fundamentally is unsuitable for calculating growth.
The GDP of Greece pre crash was $355B today it’s $219B, it’s GDP PPP pre-crash was $341B today it’s $389B if you think the Greek economy grew over that period or that today it’s a better place to live in with 11% unemployment and youth unemployment approaching 40% with the entire population having its wealth cut by nearly half than pre-2008 Greece then I have an island in the Aegean to sell you…
That is all.
What it may or may not say about Greece is utterly irrelevant because that's not what I was talking about.
If you want to say it's a more accurate model then you need to defend it more broadly.
Obviously, nominal GDP per capita matters for international vacations.
No.
It doesn’t know how much money you have, it doesn’t measure the purchasing power of individuals. It also is based on a basket of 3000 fungible goods and services without accounting for value of quality or outcomes; as explained already in this thread.
It doesn’t take into account median income, income and wealth inequality, unemployment rates or any other factor that probably matters more than how much a bag of potatoes or a new highway costs.
Bulgaria has a worse GDP PPP per capita than Russia and many other far worse places. Guyana has a better GDP PPP per capita than France or Canada.
Greece’s GDP PPP per capita and in general is now higher than its pre-2008 crash, its nominal GDP however is still nearly half of what it was.
Youth unemployment is nearly at 40% with overall unemployment at 10-11% which is still masked by the fact that many people were still able to retire early over the past decade as they were still eligible for the 60 year retirement age (and earlier for certain occupations).
None of these factors alone can be used to extrapolate how well people are doing it take far more in-depth and even somewhat subjective analysis.
For example Norways GDP PPP per capita is about 30% higher than that of Finland however the average Norwegian is probably not better off than the average Finn especially not by “30%”.
Using GDP PPP per capita or otherwise as a rebuttal for economic stagnation due to lack of GDP growth is disingenuous at best and dangerous at worse.
No per-capita metric does this. You have to use things like the median wage to capture the purchasing power of individuals. For example, Equatorial Guinea's GDP/c is among the highest in Africa, but due to insanely high inequality and oppression, people are better off in Senegal or Rwanda. Guyana, which recently discovered large oil reserves, is a less extreme example of the same thing.
I swear I don’t remember the last time I’ve seen this low level of topical knowledge in a post on HN as this one.
Whether it's better to take the median income or the per capita GDP (which is closer to the mean income) to represent the "typical" person is a different question.
Countries like Ireland and Singapore have per capita GDPs that are 10-30% higher than the US, yet median wages are lower.
Wikipedia even has section explaining why:
Many of the leading GDP-per-capita (nominal) jurisdictions are tax havens whose economic data is artificially inflated by tax-driven corporate accounting entries.
Given that, PPP is better than nominal, however you compute the average.
GDP isn't distributed evenly. PPP doesn't effect the distribution. It's just an adjustment.
An oil state like Russia has a decent GDP, but the distribution is horrendous. It doesn't matter if you look at GDP or GDP PPP. Neither gives you a great picture "what you can buy" unless you're in the top 1%.
The reality is that there American system sucks by some metrics, and yet by others which are real and not BS, the US economy crushes.
In the end human flourishing, and life satisfaction are more important than GDP, but at the same time GDP is real and it does matter.
It's similar to people who insist that folks in New York or San Francisco are better off than folks in Texas because of higher incomes, without adjusting for cost of living. If that was true, domestic net migration patterns wouldn't look the way they do. Yes, folks in New York or San Francisco can buy more MacBooks, but that's not a useful metric.
At least such a huge difference will have practical effects.
Can we fund our welfare systems without growth? (Just imagine what we could do, if the budget was 2x)
Americans who are between the ages of 15 and 35 feel like the ladder has been pulled up out of their reach, and they've felt this way for the past decade. Mostly because property owners have reaped most of the benefits of the past two decades.
https://www.cnbc.com/2021/10/18/the-wealthiest-10percent-of-...
https://www.bls.gov/blog/2023/more-ways-to-look-at-wages-and...
So can GDP.
> PPP isn’t a good measure for population’s wealth or quality of life especially for developed economies either.
Why isn't it a good measure? Why is it worse than pure GDP?
> The economy of the US is still twice that of the EU and its global purchasing power has also pretty much doubled.
The GDP of the US is twice of that of the EU. How does paying $2000 for a 50 sq. feet box makes your economy bigger?
No, not really as exchange rate fluctuations are avoided using constant international dollar benchmarks.
> Why isn't it a good measure? Why is it worse than pure GDP?
This been explained multiple times in this thread already including a link to the OECD FAQ on GDP PPP.
Nominal GDP isn’t a measure of individual wealth either, it is however a very good indicator of national economic growth.
>The GDP of the US is twice of that of the EU. How does paying $2000 for a 50 sq. feet box makes your economy bigger?
GDP PPP doesn’t include housing costs, at least not directly it includes a component which is called imbued rent which tends to grossly underestimate the actual cost of housing in a given country.
Housing in the EU is generally more expensive than in the US both to rent and to buy nearly every country has a massive housing shortage and inflated prices.
My partner bought a flat in Poland as an investment in March this year for the equivalent sum of ~£160,000, it’s a 48 sq/m 2 bed flat.
The 2nd stage of the development on an adjacent plot is starting now with the prices around £180-190K for an equivalent property.
And this is in a village 50km from Krakow… (Bochnia).
There are ways for GDP to increase while economy contracts. As the simplest example, an informal sector may become formalized and be partially reduced in the process due to new bureaucratic obstacles.
> This been explained multiple times in this thread already including a link to the OECD FAQ on GDP PPP.
I don't see OECD FAQ claiming anything close to what you imply. It actually claims that "The major use of *PPPs is as a first step in making inter-country comparisons* in real terms of gross domestic product (GDP) and its component expenditures."
> Nominal GDP isn’t a measure of individual wealth either, it is however a very good indicator of national economic growth.
A nitpick: if we talk about growth, we should talk about the change in GDP. Anyway, how is the change in nominal GDP any better than the change in GDP PPP?
> GDP PPP doesn’t include housing costs, at least not directly it includes a component which is called imbued rent which tends to grossly underestimate the actual cost of housing in a given country.
The rent is included directly. Imputed rent is fictitious income that exists to account for housing services homeowners provide to themselves to make comparisons easier between situations where the rate of homeownership is different. If it grossly underestimates the actual cost of housing, it simply means it is calculated incorrectly. As a sidenote, for lots of other services such adjustments are not made (eg eating out vs cooking at home, paying a housekeeper vs cleaning yourself).
> Housing in the EU is generally more expensive than in the US both to rent and to buy nearly every country has a massive housing shortage and inflated prices.
I don't think any EU city can compare to the US juggernauts such as NY and SF in terms of housing shortage and inflated prices.
PPP cannot be used to measure growth, period.
Nominal GDP increase indicates an increased production, PPP increase indicate absolutely nothing. In fact PPP often increase or maintains its level in times of crisis when income level drops and unemployment rises.
The US is far bigger than NY and SF and even then many EU cities can more than compare… The housing stock is far cheaper in the US and you get far far more for your money.
Yeah, and it says "Uses with limitations: To analyse changes over time in relative GDP per capita and relative prices".
> PPP cannot be used to measure growth, period.
> PPP increase indicate absolutely nothing.
No, refer to paragraphs 32-34 of the overview from the PPP Manual: https://www.oecd.org/sdd/prices-ppp/PPP%20manual%20revised%2...
> Nominal GDP increase indicates an increased production
No, it doesn't. Value = price x volume. If value has gone up, it means either price or volume had gone up, but you cannot say more than that; for that you need real GDP.
> In fact PPP often increase or maintains its level in times of crisis when income level drops and unemployment rises.
Yeah, GDP and GDP PPP are both imperfect metrics. They are just proxies and should be treated as such.
> The US is far bigger than NY and SF and even then many EU cities can more than compare… The housing stock is far cheaper in the US and you get far far more for your money.
So what? It doesn't change the fact that nominal GDP fails horribly as a metric for such cases.
Zurich, London, Paris and Munich
Also median income in SF and NY is much higher (with the exception of Zurich) so it should be much easier for an average person to afford a home in NY than in Munich.
Isn’t real estate generally cheaper in the US than in Western Europe in PPP terms?
The common (and relevant measure) is real gdp growth or growth minus inflation. (And per capita if that is your concern.)
The GDP wa invented by a russian working for US bureau of statistics during the great depression. It was a helpful measure to compare performance of different US evonomic sectors. It favors deficit spending to saving.
It is a very inadequate measure for people wealth in any developed economy.
https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locat...
Now, I have no idea what thebdifference between constant USD, current USD and the international versions are, and wpupd be happy if someone cpuod explain it since the differences are huge, but measured in curren international USD, the EU and US GDP charts move more or less in parallel with the EU one being a little bit lower. But of course, a chart that shows a huge delta developing makes for much better headlines, and more eyeballs on the article...
EDIT: Just played around some more, the numbers only allow for sensationalism whem using current USD, taling any other constant value the story is a lot different. And the root cause seems to be two periods, 2012 - 2014 when the EU GDP growth was significantly below US growth (it was negative for the EU in 2012 and 2013), and 2020 (EU -5.7, US -2.8). So, if everything it is old news, or worse just a wrong representation of data to justify headlines and narratives (looking at you WSJ, not some Twitter thread).
https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2...
GDP chart in constant 2015 USD:
https://data.worldbank.org/indicator/NY.GDP.MKTP.KD?location...
I've just started to read Graham Allison's Graham Allison (supposedly based on this article [1]) and the exact opposite remark is made at the beginning of that book, i.e. that one should use PPP numbers instead of nominal GDP numbers when looking at the quality of life.
[1] https://www.theatlantic.com/international/archive/2015/09/un...
GDP per capita (PPP or not) is a bad (and very lazy) indicator to use if you’re trying to measure QOL.
But obviously I can live without these things and for vital things, like laptops, washing machines, dish washers or tvs (not really vital), they cost peanuts second hand.
[1] https://www.wsj.com/articles/europeans-poorer-inflation-econ...
EUR/USD in 2000: $0.92
EUR/USD in 2022: $1.072
US GDP in 2000: $10.25T, 2022: $23.31T, growth of 227%
EU GDP in 2000: 7.86€ T, 2022: 15.81€ T(27 countries, excluding UK), converted to USD:
EU GDP in 2000: $7.23T, 2022: $16.94T, growth of 234%
Growth in the EU from 2000-2008 has probably (didnt crunch the numbers on this) been higher than in the US and then lower since around 2010. Also take into account that while growth has been slow (or even non-existent) in France, Portugal, Italy, Greece and Spain those countries make up less than half of the population of the EU. Eastern european countries on the other hand have grown very strongly thanks to starting from a very low base.
What’s worse you’ve committed a double sin, you’ve used figures which were already normalized using the constant international dollar and applied exchange rates to them.
Other way round. PPP is a consumptive measure.
Eurozone inflation 2008 to today has been 33%
US inflation 2008 to today has been 42%.
This doesn't square with your implication that the US inflation is double the EUs.
2008 was the peak of EUR value after subprime crises in USA. And the "nearly two times" is more like 1.60 which is explained by the value of the euro coming back from 1.6$ to the more sustainable long term value of 1$.
(usd/eur chart https://www.macrotrends.net/2548/euro-dollar-exchange-rate-h...)
Differences in income have a surprisingly small effect on quality of life. If you make more money, you can still afford the same luxuries. Just more of them and more often. You are likely buying bigger and better versions of fundamentally the same things. You probably spend your money less efficiently, buying all kinds of minor conveniences.
And if everyone around you makes more money, your expectations go up, and your spending will be even less efficient.
https://freedomandprosperity.org/wp-content/uploads/2022/02/...
That said, these numbers are very misleading and do not show well what a person’s life looks like in the US. By my own anecdotal estimation, in the EU low and medium income people live a better life than in the US and have more livable wages, relaxed work culture, and enjoy a strong safety net. The missing GDP growth seems to show up in the upper middle to high incomes where it is extremely hard to pull away from the pack and acquire wealth. Things like early retirement and FIRE are almost unheard of in EU countries. Stock investing seems much less common. People mostly seem focused on more conservative investments like real estate that has a lower yield and liquidity than equities. Luxury spending seems limited to small consumer outlays like fashion or travel, not large wealth building outlays like McMansions. It is really, really uncommon to hear of someone making more than 100k USD and taxes in most countries take a bigger bite. There are even significant wealth taxes in some countries. For example in some parts of Spain the wealth tax is high enough that it would be impossible to live off investments as the safe withdrawal rate is so low that you would need millions to fund a modest income.
All of this is deep in the political psyche that wants to cut down the tall poppies.
Well here is an actual study that found the poorest 20% of Americans consumed more goods and services than the average people from affluent countries. Including Europe.
https://www.justfacts.com/news_poorest_americans_richer_than...
This matches my anecdotal observations of everything being smaller in Europe, people owning less, and energy being so expensive.
It's also terribly USAian of you.
Btw, we need budget for more They Live glasses to distribute freely
Indeed. In my town center, on the weekends, the streets are full of Teslas, luxury cars and SUVs of the well off people from the suburbs with nice houses, coming to the city for shopping and indulgence in various forms of consumerism and showing off (mostly inherited) wealth.
Europeans are just poorer and more unequally wealthy than Americans, with fewer people owing most of the wealth, not more righteous.
Europeans are poorer but the US generally has higher inequality, whether you look at Gini, IHDI or mean versus median wealth. Especially the wealth comparison is jarring for the US (about 6:1, most of Europe is at 2:1 or 3:1).
https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe...
The data I've seen says the exact opposite.
Edit: Also my link has the Gini inequality index as the last column, where the US is literally sandwiched between Congo and Algeria, towards the bottom...
Also, in the GINI table on the wiki page, Netherlands and Sweden have more wealth inequality than the US.
Also, I find the GINI formula quite flawed as it puts India as being more equal than many EU states which I find hard to believe.
To me wealth inequality is how much of the country's wealth the top % own versus the bottom %, and at least in Germany and Austria it's pretty bad.
That's exactly what the GINI formula is, though. (Pedantry: the formula can be applied to any measurement, be it income or wealth or blueberries. We'll assume wealth.)
The reason some of those numbers look weird to you is that the most common form of wealth is house ownership. In Germany, Benelux and Scandinavia house ownership is quite low, while in Southern and Eastern Europe it is extremely high.
Who is better off? Someone who inherited a home, or purchased it relatively easily, but earns a weak salary? Or someone who must rent because he cannot afford a house, but earns a much higher salary and has more disposable income?
Poverty is relative. What use is it earning a high salary than someone from a poorer country if you can't afford to live in your richer country?
To simplify it to the absolute extreme:
- A earns 100 and pays 25 in mortgage, or even 0 if he inherited
- B earns 300 and pays 100 in rent, but a mortgage would cost him 250, or perhaps he can't get one at all
What does it even mean to ask "who is better off" here?
On a daily basis, B obviously lives better, that part is simple at least. (I personally moved from A-like to B-like quite recently.)
Now when it comes to long-term financial plans, A has a massive illiquid asset, while B has a smaller stream of liquid assets. A is more protected against financial catastrophes - he won't end up homeless, and can keep going with a minimal salary - however B does not have any assets tying him down, so he can more result move to a more prosperous area if needed. And so on.
But you look at a wealth map and it'll just tell you that A is "richer"; or you look at an income map and it'll just tell you that B is "richer".
It was kind of cool actually.
How much you can consume is also linked to how much space you have to use and store stuff. In 2015, 40% of the american households had three or more TV sets. I don't know anyone who owns three TVs here in Europe.
I'm saying no one except USians would say "I consume more than you, therefore my quality of life is higher".
I wonder how much of those are things like "credit protection fees", "check printing fees", CC anual fees (of multiple CCs) or just paying hundreds of dollars for a medical consultation even after copay, etc
> everything being smaller in Europe, people owning less
Your car does not need to be a d*ck measuring contest, and public transport usually works
but then even those go somewhere, and apparently almost all of that goes back to the US economy through underpaid semi-legal wages. (and then some of that goes back to countries where the undocumented immigrants' are from, and then that goes to pay for plane tickets, so more people can try their luck in the US.)
circle of life!
What are the numbers there? I heard of the wealth tax above €3 million, but is there more?
For a net worth of €4m, you'll pay €60k in Aragón to €22k in Vizcaya to €0 in Madrid.
So that hurts the whole FI/RE thing, but doesn't sound like it would be the primary blocker.
This is true, but understated in a crucial manner. By global standards, the greatest enduring strength of the US economy has been its ability to recover from downturns. More than anything else, that has pulled it ahead of competitors time and time again. When the early '80s financial crisis hit Japan with a lost decade, Volcker (PBUH) pulled the US out of the doldrums and back into a growth phase within three years. When the Asian financial crisis hit at the same time as the dotcom bust, the US recovered more efficiently than the erstwhile "Asian tigers". When the 2007 financial crisis went worldwide, aggressive measures by the Fed and a willingness to risk inflation restored growth faster than in Europe. When COVID hit, economies around the world dived, but even with political divisions running at their highest since 1876, the US again restored growth more quickly than almost anywhere else — now growing at competitive rates with China.
There are a variety of theories about this, but one iniquitous postulate I've heard is that the US makes it a lot easier for companies to do layoffs — not a happy proposition for those directly affected, but what could be worse for an economy than having thousands of people working on something that just isn't working? Many worker protections — for health, safety and family — have become more popular with economists recently, but when the subject of being able to fire people comes up, there is still a sort of grim understanding transmitted in whispers: paying someone who isn't making progress makes us all worse off in the long run.
Of course we can also trace the roots of some profound social malaise — including the collapse of whole cities — to the cutthroat nature of employment in America; there is no free lunch.
The problem with taking general economic lessons from the US is that the US is in a unique, and uniquely advantageous economic position.
Comparing different legal systems and different practical implementations of those systems is hard - but I think the basic claim, that there's a inverse correlation between employee's rights and economic growth, isn't visible within the EU or elsewhere.
The UK is a good example because they have aggressively reduced the safeguards for workers (between 2014-2017 it was essentially a state with no safeguards if you could not afford the employment tribunal process), and is also an example of consistent poor economic growth.
There's a big gap between the US and UK in this regard. The UK has and enforces the concept of an unfair dismissal as distinct from being fired due to discrimination. The US has the latter but not the former. In the UK you can't lay someone off if it would be unfair or if your dismissal process was unreasonable, where unreasonable can mean purely bureaucratic reasons like not following your own dismissal checklists.
In addition British employment tribunals are very worker friendly, resulting in frequent bizarre outcomes [1] like:
- "A worker who was absent for 808 shifts over a 20-year career – costing the firm an estimated £95,850 in sick pay – has won tribunal claims of unfair dismissal against his former employer." (employee won because employer didn't follow their own absence management procedures).
- "An office manager was discriminated against after she was told she was not allowed to work remotely from her son’s hospital bedside", deemed unfair because the boss "gave her views no credit" and "had a closed mind".
- "Worker unfairly dismissed for complaining about boss on Facebook, tribunal rules"
- An NHS worker who resigned won an unfair dismissal claim, because her workers had played a practical joke on her at one point and didn't like it when she complained.
- A lecturer accused of sending “aggressive” messages to colleagues was awarded £15,000 for unfair dismissal after an employment tribunal ruled there had not been a proper investigation into the allegations made against him, whilst also concluding that he had indeed sent aggressive messages.
The idea that this is a country that's "aggressively reduced safeguards for workers" will seem blinkered to the Americans on this site, who can be fired with zero notice and for any reason at all, with recourse only available if it can be proven to be sexism/racism/union organizing/etc. Winning huge awards because you weren't allowed to work remotely hardly exists there.
[1] https://www.peoplemanagement.co.uk/article/1747159/worker-ab...
1. I wasn't claiming that.
2. It's not silly at all. British companies were and are flouting employment laws[0].
3. If the plural of anecdote is not annecdata, what's the plural of a cherry picked, unsourced, and likely misrepresented court ruling? Fiction?
[0]: https://www.economist.com/britain/2018/06/14/british-employe...
>If you look at the employment protections of the UK[0], and compare them to the US[1]
I think you meant to include citations at the bottom, but I don't see them.
What you call "cut down tall poppies" others call "correcting thousands of years of aristocracy-fuelled unfairness". European wealth has much older roots. In a few centuries, Americans will likely reach a similar political point.
https://www.economist.com/graphic-detail/2018/02/14/american...
It is possible that some European countries have over corrected though.
Well, the US has become a bastion of neo-feudalism, so there's that.
We don't even have to pick the extreme outliers where affluenca officially plays a role. Someone that can spend a million on lawyers in the US will get a better outcome.
What does taxing _income_ of upper-middle class high-earners (who are probably coming somewhere from Eastern Europe and are not related to Habsburgs or something) have to do we dealing with _generational_ wealth of old-money families? In fact, descendants of well-off parents seem to do just fine. If anything they basically becoming landed gentry considering how unattainable housing has become.
also wealth generates income.
plus taxing income is easier, less transaction costs. (no need to sell the house to pay wealth tax.)
of course non of these invalidate your observation about landed gentry, absurd housing prices, etc.
So tax income types that tend to come from wealth instead. Compared with regular salary income that is heavily taxed in Europe those usually incur significantly lower tax rates (long-term capital gains tax, dividend tax, etc.).
> plus taxing income is easier, less transaction costs. (no need to sell the house to pay wealth tax.)
You are confused about how wealth taxes usually work. They are something you pay every year based on your total assets, not when you sell the assets (these are capital gains or property gains taxes).
> of course non of these invalidate your observation about landed gentry
Becoming a landed gentry is intentional end game of current asset owning classes in Europe. Let's take Sweden as a worst offender - locals sit on top of their multimillion+ property (that they either inherited with 0 inheritance tax or got with tax-deductible mortgage when prices were saner), don't pay any wealth taxes and would like immigrants to pay for their welfare state with crazy income taxes while simultaneously extracting exuberant rents from them indefinitely by making housing basically unobtainable through regular income. Mind you this isn't European-specific problem (prop 13 landed gentry says hello), but Europeans tend to have this annoying holier-then-thou attitude towards the US paired with complete lack of self-awareness.
No, I'm not completely, that's what I meant. That wealth tax can force people to sell.
Yep, sounds similar. Inheritance tax was also terminated in Hungary, and you can give unlimited value to your parents/kids tax free.
The moment I saw the article headline, I knew the comments would be full of people running defence with fuzzy claims of qualitative wellbeing.
"Yes, our economy may objectively be underperforming, but look at the Life Quality Index, invented at the University of Copenhagen, which divides the number of UNESCO sites in a country by the number of different pension schemes...
The hard truth is - less prosperity means less money for nurses, less money for teachers, less money for infrastructure. Worse health outcomes, worse educational outcomes, worse transport and logistics. A decreasing quality of life. Less prospects for children. Increasing emigration.
Europe devotes a disproportionate amount to social spending compared to the US, so it remains competitive despite its shrinking economy, but this won't continue forever. Eventually, Europe's economy will become so relatively small, that even its outsized social spending will begin to be dwarfed by the spending of US states. It's been the case for some time that Portuguese professionals are leaving to go drive trucks in the US, and now doctors in the UK are getting poached en masse by Australian states. How long until German engineers can have a better life working as taxi drivers in China?
I like Europe and I wish it would right course, but there is an aggressive myopia on this continent when it comes to how quickly the rest of the world is moving past them, and how very bad that will be for Europe in the mid-to-long term. Europe's slide into irrelevance will be a net loss for us all, but most of all for the quality of life of Europeans themselves.
See this one for Spain: https://www.reddit.com/r/SpainFIRE/ or Bogleheads Spain: https://bogleheads.es
The wealth tax also makes FIRE harder, but there are exemptions that make it more manageable.
Here is information about the wealth tax in Valencia: https://atv.gva.es/es/ipatrimoni
Let's use a married couple in Valencia with 2M euro in index funds as an example.
They get 500K allowance each to subtract from their taxable base. Subtracting the 1M total exemption for the couple, their taxable base would be 1M euro for the purposes of the wealth tax. On the remaining 1M, they'd pay 10,595.71 for the first 668,499.75, and 1.12% on the remaining 331,500.25, for an additional 3,712.80. This puts their total yearly wealth tax at 14,308.51, or about 0.7% of their total 2M portfolio.
Generally, 4% is seen as a safe withdrawal rate for a properly managed portfolio for a 30 year retirement. Subtracting 0.7%, that'd give them a 3.3% safe withdrawal rate on their 2M portfolio, which gives them after-wealth-tax money of 66K to play with. Let's say half of what you're pulling each year is taxable for capital gains. With a 20% capital gains tax, that ends up being about 60K. This is a pretty good income for Valencia.
Estimated cost of living for a family of 4 there is about 28K: https://www.numbeo.com/cost-of-living/in/Valencia
That gives them another 32K after tax for travel, luxuries, etc. Not to mention, you also get an exemption of 300K (individual) for your primary residence. There are also some other limits on the tax like it not being able to exceed 60% of your total income.
In the US, with a withdrawal rate of 4% on the 2M and no wealth tax, you'd get 80K. After 15% capital gains on half of what you're pulling each year, 74K. Subtract $1400/month or ~$16K for good health insurance for a family of 4 and it's a basic tie, not accounting if you have to actually hit a deductible. In Spain you will just get free public healthcare if you're a citizen.
It's definitely harder to build that level of wealth because of salaries there, but I don't think it's fair to say that it's completely impossible to FIRE there.
I overestimated the tax by a lot, I misread the chart and was adding the "Cuota" (sum of previous row taxes) from 1 row below what I should have.
They only pay 3,108.51 on the first 668,499.75. This puts the total tax at about half of my estimate, so only a ~0.35% drag on their 2M portfolio.
It's a very progressive tax, basically goes up 10X for really rich folks (>10M they take 3.5% of total wealth).
==2021==
Life expectancy in EU: 80
Life expectancy in US: 76
==Rolling back to 2008==
Life expectancy in EU: 79
Life expectancy in US: 78
What’s the point? Maybe GDP isn’t the most important indicator. The US can double it’s GDP by making healthcare more expensive and extracting every last dime from the elderly, but can it actually improve quality of life for people? [1]
[1] https://data.worldbank.org/indicator/SP.DYN.LE00.IN?location...
You are saying that you would rather live a shorter time in good health than a longer time being unhealthy at the end.
I am saying that the day will come when you start to deteriorate, get aches, getting slower, maybe even critically ill. During all that you will most likely still not want to die.
People suffer in every age group most of them don't want to die. Why do you think you would?
https://www.health.harvard.edu/blog/why-life-expectancy-in-t...
A white person living in well-of state has about the same life expectancy as those living in the highest rated European countries.
I suspect what's driving down life expectancy is me OD'ing on fentanyl at 30 or getting killed in a shoot out at 20 or dying in a car crash at 10.
Short version of what I think is going on - young people dying lowers life expectancy a lot more then old people dying a bit earlier then they might have.
The USA also has a higher percentage of young people and more of them are dying from drugs. That skews a metric line that. Do it by cohort and it’s different.
There’s a reason millions more people from the EU live in the USA than the other way. Or why there’s a line 100s of millions long to come to the USA.
Nowhere is perfect but as a world traveler I’d say the USA is pretty great. What I have found most interesting over the last 20 years is that the conversation has moved from USA/EU to USA/Asia. Europe has become lodged somewhere between that and Africa/South America but Euros haven’t noticed it yet. Business has.
That the EU has 100million more inhabitants, a history of relocating to the US or american culture and language being extremely present all over western society?
>Nowhere is perfect but as a world traveler I’d say the USA is pretty great.
"Nothing is like home" - news at 11.
Well these just reinforce his point
The culture/language being widespread doesn't say anything about the USA being better. How does that reinforce his point?
If you’re skilled/smart then the USA will offer a much higher quality of life. This is why these types of people move to the USA and Europe suffers from brain drain. (Hint - high taxes chase people away to better places!)
There are exceptions though! More Americans move to Norway than the other way. It’s a richer country so that makes sense.
But check out this article from today:
https://www.wsj.com/articles/europeans-poorer-inflation-econ...
Its more of a matter of whether its popular to do culturally, there is also freedom of movement and trade between all the EU/EEA/EFTA nations. If your home country makes it hard to start a limited liability company, you can form one in the country+state that makes it easy, and transact and bank in your home country. Just like in the US.
and you should talk with different people in your travels. People comfortable in their developed nation are not trying to come to US and would be confused at the suggestion as they only focus on news about marginalized groups in the US, no different than an American would be confused about someone assuming they have a fondness for China before that American rattles off about a dozen civil rights things that wouldn't actually affect privileged people in their equivalent socioeconomic bracket there, as if it defines the whole country or a day to day experience.
its pretty easy to see through this conditioning: American exceptionalism relies upon being compared to the most mismanaged and authoritarian places in the world, it ignores the existence of developed nations with balanced budgets, social safety nets, with similar taxes.
This matters because when you look at these crude aggregate stats, people naively assume that it means that everything is a bit worse but the actual American story is usually more like broad prosperity with some truly awful outcomes for anyone who falls through the (very wide) cracks.
So like... nyeh
by what metric?
The US as a whole might be more diverse than a single EU country, but it will depend a lot on your metric for diversity.
The difference between states is big but you go on to say that it's as big as the difference between two European countries. Your comparison only points out Europe is as least as diverse as the US and still has a significantly higher life expectancy.
Are you seriously to claim that the EU is a single country? Or that there are no differences between EU countries? That link actually has a table of all EU countries, and it ranges from 72 to 83. This is actually a LARGER difference than in the US: where it ranges from 74 to 82.
You need to read what's actually being said before climbing up the walls.
This post is about GDP growth. What has life expectancy got to do with it, and how are you contributing to any discussion? Has anybody here said that "GDP is the most important indicator"?
Personally I think average Americans have a hard time imaging a world where there is more to life than money.
Ultimately whenever I see these "murica" centric posts, I remember them flying in emergency medical supplies from China and everybody being upset about how the worlds greatest super power didn't have enough supplies for their own medical staff.
Stay humble.
Europeans miss the point that you still need money to fund all those generous social benefits we have. Without money and a stagnating economy there will be less welfare to go around.
I've lost track of how many financially illiterate people told me "I don't care about the economy, as long as we still have great quality of life" who miss the part where that great quality of life is funded by that same economy they don't care about.
Not entirely, of course you need money but you need people who believe in the cause to work towards it and make sacrifices. I work for a NFP, I took a paycut to do it. I'm happier for it.
I think a lot of America goes wrong because most people want their cake and to eat it too. Free healthcare? It will require sacrifices in the form of higher taxes.
Canadians pay higher taxes than Americans and their social services aren't that much better now that the US's. Why isn't it working for them if higher taxes and not a stronger economy is the solution?
Whenever the state says "give me more of your tax money so I can take care of you", check your pockets.
To be fair, I'd also agree with more taxes, provided those in power would be held accountable and punished severely for mismanaging it and that they would try to address growing inequality, but as long as they're unaccountable and spend my taxes like drunken sailors giving it to their golf buddies in the private sector while pushing for austerity for the plebs while the rich get richer, I'll do everything I can to pay less taxes to the state so I can defund it of the capability of improper spending, and use that extra money to take care of myself and my loved ones.
You see, that is already happening, just through other means. The political situation isn't really favoring Joe Sixpack, or even software engineers, it's benefiting the very few ultra wealthy.
You know how nowhere near enough is being done about climate change? That's because no one in government really cares about the impacts on you or your family. Because the energy companies are happy.
Google and Meta stealing your private information without your consent? Nothing will be done about that either because corporations own America.
IMO the fact we pay lower tax and are all just thinking it means we're better off by default is the joke. It is the pacifier.
I 100% agree with you though, higher tax does not mean things get better, absolutely not. What people have to do is grow brains and participate in democracy and not via Twitter on Instagram but actually doing some work.
I'm responding to a (one of the many) cases of people being strangely upset and irrational about a simple fact about the US doing better in this one metric recently. There is no "opposite" about it, I never said it does not happen the other way around, I'm questioning why it is happening this way around in this thread. And again that is making people upset and bringing up other unrelated things, which is quite ironic really.
> Personally I think average Americans have a hard time imaging a world where there is more to life than money.
Personally I think it's sad that so many "educated and enlightened" people are okay with making vile accusations and generalizations about others they know nothing about.
I know a bunch of Americans and almost all are warm, friendly, generous. Some very driven, very few who struck me as being all about money. I feel sad that many have been to feel ashamed of themselves by this kind of casual bullying.
> Ultimately whenever I see these "murica" centric posts, I remember them flying in emergency medical supplies from China and everybody being upset about how the worlds greatest super power didn't have enough supplies for their own medical staff.
I don't quite understand what you're getting at. You're upset by the fact that the US economy measured by GDP grew much faster than the EU recently, but you take comfort from the fact that China manufactures a lot of things that other countries buy such as medical equipment and there were shortages of various goods during Covid. I don't know what to make of that but I'm sure there's some interesting psychology behind it.
If it happens both ways then it doesn't matter why, it's a kind of passive aggressive question then? You know that many people don't like America and it's way of operating, which IMO is about maximizing profits and throwing people under the bus to do so. No great national doesn't offer world class free healthcare, sorry. But that is the challenge of our time and we in the USA have failed. We have also failed, very ,very hard leading the world through climate change, so we're just a bunch of rich people with no leadership strength now.
Personally I think it's sad that so many "educated and enlightened" people are okay with making vile accusations and generalizations about others they know nothing about.
Regardless of any of your accusations, being that I'm some kind of generalizing monster, there is no place on earth that worships money like the USA. Sorry but that is just how it is. I've never experienced anything quite like it. Money is the religion. That's why we're having a GDP party.
I know a bunch of Americans and almost all are warm, friendly, generous. Some very driven, very few who struck me as being all about money. I feel sad that many have been to feel ashamed of themselves by this kind of casual bullying.
So do I, but I guess you're also generalizing that most Americans are lovely, because I know many that aren't. Saying this, Americans aren't any nicer per-capita than anywhere else in the world. There are nice people everywhere and there are dicks everywhere.
The problem with America is it's politics and the access lobbyists have to politicians. I think Americans are probably too nice and too gullible to see the situation improved.
Lobbying is a fairly unique problem in the US which causes things like mass shootings at schools to happen. The NRA makes sure everyone has guns (for example).
I don't quite understand what you're getting at. You're upset by the fact that the US economy measured by GDP grew much faster than the EU recently, but you take comfort from the fact that China manufactures a lot of things that other countries buy such as medical equipment and there were shortages of various goods during Covid. I don't know what to make of that but I'm sure there's some interesting psychology behind it.
Again, you're making accusations now. I don't take comfort in it, but I am saying it's important to be humble. I think boasting is a major character floor and again, had China decided not to send supplies, America would've been quite screwed. So yeah, let's be humble no matter how big our GDP cock is.
Wrong.
[snip bitterness]
While we're dispensing with unsolicited advice about what is and is not important in how we think, you can just choose to not be upset by this stuff. The fact is here that lots of people are getting irrationally upset by the this GDP story. You can make peace with that and just move on without having to start bashing America or Americans. Ranting about how you think the average American has a hard time imagining more to life than money and things like that is just deeply weird. Fascinating though, so feel free not to take my advice and continue with it.
I more often get the impression that it’s the other way around. As if the fact that there is more to life than money somehow justifies the fact that much of Western Europe is now economically permanently stuck in ~2008 due to some very misguided policies..
It's definitely both ways. Things Americans are snarky about: - Europe starting world wars, America getting pulled in and 'winning' them (taking an outsized view of America's role) - "Everything is so small here"
Things Europeans are snarky about: - Not knowing geography or anything about the world outside the U.S. - Tipping - Atrocious public transit - High healthcare costs for poor outcomes
My point is to suggest that maybe top line numbers don’t tell the whole story. Maybe in a society where wealth is hyper-concentrated, the heuristic coupling of GDP growth and social progress breaks down.
Flip the US and EU, it makes no difference to me. My point is that GDP is a poor metric for most things we should care about, and maybe we should get off the paperclip maximization train and onto the well-being maximization train.
I can't seem to read the twitter comments but I don't really see that here, at least in top level comments it seems to be all people who are quick to jump from that to making excuses or trying to rationalize why these numbers are "bad".
I don't know what would be the problem with talking about economic stagnation though, significant differences in GDP growth between ~comparably advanced economies doesn't seem like a bad starting point for that, does it? I notice you didn't actually reply to such a comment, but even so I don't know why you would bring life expectancy into GDP stagnation either. There's certainly a fairly strong correlation and almost certainly causal relationship, but nobody seems to be confusing GDP with the sole driver of life expectancy or believe that GDP tells "the whole story". So it seems like a weird thing to bring up, you could also bring up wheat production and point out that it isn't fixed to GDP, because it also doesn't tell you that story.
However, the US dodged the austerity fad bullet in the 2010s. A lot of the EU really fell for it hard.
Austerity is a fantastic way to inhibit growth.
The UK for example made deep cuts to healthcare and education, cost a lot of people jobs right at the worst possible time (on the heels of the Great Recession). Many smaller worse off countries did even worse.
The austerity in Europe was far, far worse than anything that was happening in the US. The US government finance establishment for whatever reason was not infected by that particular bug. The US passed a large stimulus bill and in general was in a stimulus mindset.
Europe on the other hand thought it could cut its way out of a crisis.
I'm curious as to your reasoning about why people do anything other than the absolute minimum to receive their paycheck.
You're presuming a fixed demand for labour, regardless of how much value it provides. Imagine if, for a moment, productivity increased to the point where one person could do all current work for all current employers, but of course there were many, many other people who could provide the same productivity. Do you expect that employers would not figure out a way to use some of that additional productivity to make more money?
The demand for a product increases as value it provides increases. The net effect is that employers' profits increase, but so do labours'. The divide on the split is determined by relative strength of their positions, but if it ever goes to zero for either side, it really kills the incentive for increased productivity in the first place (if employers see no benefit from increased worker productivity, there certainly won't be any more demand, and there will be no effort to exploit this new productivity... if employees see no benefit from the increased productivity, they'll have no incentive to be more productive).
If incomes stay the same, you would expect the price level to fall (aka deflation).
Look at real total compensation growth over that time.
The idea that the average worker is not better off now versus 1970 is not a reasonable take.
it's almost as if forcing completely disparate economies onto a one-size-fits-none currency with a single interest rate and no fiscal transfers was a monumentally stupid idea
Dropping German consumer demand has nothing to do with competitiveness and trade surpluses.
It’ll be interesting to see how that strategy works now that we live in a new geopolitical reality. Unlike us in Scandinavia who will have to start from scratch, sort of, Germany already has the means of producing and an infrastructure in place to expand it rapidly. It’ll take some readjusting, but once the non-EU competition gets hindered political means, there is no reason the wages shouldn’t increase. Especially because the steam was already running out of the cheap labour schemes.
Maybe it’ll turn out Merkels bet on keeping industry was even further reach than we thought.
Why should I care if gdp isn’t increasing when I don’t see any gains whether it does or not?
And that’s with the poverty level being a moving target.
>Here’s another statistic on dynamic equality in America: 10% of Americans will spend at least one year in the top 1% of income earners, and more than half of all Americans will spend at least a year in the top 10% of income earners. Since what we’re trying to do is allow the market to reward those who contribute to society, greater turnover among the rich in the United States is a sign of fairness.
https://www.shortform.com/blog/types-of-inequality/
https://medium.com/incerto/inequality-and-skin-in-the-game-d...
That's categorically not true. Adjusting for inflation, wages today are up 6.8% compared to 2008.
To bring things back a bit, the argument was that
> housing and other costs like childcare have increased astronomically during that period negating any real gains
Yet, gruez is downvoted while citing CPI-adjusted wage growth showing the contrary. CPI, for everyone's information, includes rental and housing costs in its indexing, as well as child care and many other services.
Of course, it's just one (financially significant) formula, but it was a good faith rebuttal and the only comment in this thread citing anything close to objective evidence.
A study by the San Francisco fed in 2022 [0] calculated that based on Zillow market data, the rent component of the CPI is to increase by about seven percent each year in 2022 and 2023:
> Our model confirms that an increase in current asking rents or current house prices can push up the CPI rent index for a typical MSA for as long as 24 months into the future. Given the currently elevated levels of Zillow asking rent inflation and Zillow house price inflation averaged across all MSAs, the model predicts that CPI rent inflation will increase by about 3.4pp for both 2022 and 2023, relative to its historical average rate of 3.7%.
[0] https://www.frbsf.org/economic-research/publications/economi...
And that's fine, because the CPI is for the whole country. Not everyone is a renter looking for a place right now. Some people do indeed have houses and therefore their housing costs are locked in perpetuity. If you take nominal wages, and deflate that using cpi-with-market-rents, that would indeed more accurately describe the plight of someone who's renting, compared to normal cpi. However, it would also make it the situation look worse than it is for someone who owns their home, because their housing costs are essentially fixed. You might empathize more with the former and think their plight deserves more attention. That's fine, but the specific claim being made was for the economy/country as a whole, not for a specific demographic.
What kind of an argument is this? Clearly the OER must be a current indicator (i.e. not lagging) if it is based on current rental expenses. The small section of the population that is in the market for a new place to live should not be taken as the average for the entire population. If anything the market rents are just an indicator of future OER.
If you were tracking the inflation of banana prices and the market price for bananas went up 10% year over year, does someone having a fixed price contract from a year ago affect the actual inflation of banana prices?
The original comment makes no mention of CPI. It only mentions that certain categories of goods have outpaced wage growth. Of course you're going to get that result if you cherry pick your basket.
Also, extremely uneven economic distributions tend to be bad for large segments of the population due to inherently limited resources like desirable beach front property as well as artificially limited resources like city apartments.
More jobs are only good if they actually provide a living wage.
This is false if you spend even a few seconds thinking about it.
Not all jobs are intended to "live" off of. Most of your entry-level jobs were supposed to be for highschool and college kids working part time.
The problem is we have more and more people never graduating out of entry level positions, and today we have folks demanding those entry level positions support a comfortable lifestyle.
You're supposed to graduate out of entry level work after you acquire skills, training, and/or education. Why are people not "moving up" is the real problem...
This is some soft language hiding some bad assumptions.
"supposed to be" - what does this mean? because it's a lot more interesting...low skilled jobs, are probably what we're going to be talking about. However, it's not the 1950s anymore. eg Staffing a movie theater is not a part-time job (which you would know if you have ever worked one), even post-covid.
Targeting for graduates (or current students) is reserved for economies like college towns, historically. Those places have also experienced wages rising noticeably over, at least, the last 2 decades. Industrial and metropolitan areas don't have enough "school labor" to staff all the unskilled positions, regardless.
> Not all jobs are intended to "live" off of
If you have a fulltime job, the minimum wage is intended to allow you to survive^. The main issue is that places with fulltime positions open to unskilled labor, have living costs that outpace the minimum wage...all the way out to the most rural of US towns. The financial guidelines for employees from McDonalds, Wallmart, etc are telling.
^Claiming that jobs that pay minimum wage and only allow working 30 hours a week, aren't intended to "live" off of, is cherry picking exploitative employers. This is not compelling, nor the common case, so we can focus the discussion on the issues that the majority of the economy deal with.
This is the issue - the idea that minimum wage is supposed to be "livable" is a modern notion.
Unskilled labor probably shouldn't be livable. If someone can be trained to replace you in a few minutes (i.e. unskilled labor), then the truth is your labor is not worth a lot.
We need more people moving up into skilled labor. It's really hard to imagine someone working 30+ years at a job and not developing skills... yet that is what's happening more often today than ever before.
Highschool and College kids don't need a living wage. They need flexible hours, and schedules that fit their available time (night shift, swing shift, whatever...).
The only way for that to work is to have a slave population, because why should a living and breathing human being waste their time and their life with work that doesn't even sustain them? The concept of "unskilled labour" is a lie. Otherwise you could hire dead people from the graveyard.
> Highschool and College kids don't need a living wage.
Do you have any good arguments as to why you should be allowed to have a living wage?
Need? No. Would it be better for society? Maybe. This is not really something that people disagree with. Dispensing with the repetition will save the distraction.
> the idea that minimum wage is supposed to be "livable" is a modern notion.
https://en.wikipedia.org/wiki/Living_wage - back to 1604, or earlier or later; what does it matter?
> Unskilled labor probably shouldn't be livable.
Why? Arguing the economic consequences are not a reasoning.
There will always be humans who are incapable of skilled labor (of any note) beyond newly educated students. eg The Calculator profession and other forms of industrial collapse as well as immigrants (legal or otherwise) and the disabled. It's not clear what you think is the obvious way to keep these people alive. Welfare/socialism or pretending they don't exist, relegating them to a slave class, or exile?
A notion that dates back centuries and one specifically enshrined in law in Australia, a G20 country, since 1902 (ish).
I dare say other G20 countries also support this notion (aside from any antiquated holdouts still clinging to non SI units).
That doesn’t sound right. To me it seems obvious the problem is these jobs used to provide more purchasing power than they do today. The increased grievance would be because of this drop in purchasing power, not because people are suddenly demanding a “comfortable” (<- loaded word) lifestyle out of the blue.
Did McDonalds used to be closed during weekdays when all their cooks and register staff were in school? I don't remember that.
Palm oil is in everything in the US, in France there's a lot more lighter oils and butter.
Obesity is a side effect of having so much food that calories are cheap and plentiful. That’s why obesity rates are rising everywhere in the first world. It’s also something virtually unprecedented in human history.
Btw obesity is rising in Europe as well.
That decline is an anomaly. The majority of it is attributable to covid, and a significant minority attributable to fentanyl: https://www.cdc.gov/nchs/pressroom/nchs_press_releases/2022/...
I do agree that the "rising tide raises all boats" rhetoric is largely bunk. But I don't think that this one particular measure, taken at an anomalous time, is sound footing for a counterargument.
A rising tide obviously raises all ships, including the nation's poorest.
To create vast wealth generally requires vast resources, which requires vast amounts of people. Behemoths the size of Amazon, Walmart, Microsoft, Google, et al employ significant chunks of the population - and not just directly.
Trickle-down doesn't mean everyone will be a millionaire by doing nothing... instead, it means a ton of smaller companies are boosted while servicing larger companies, and so on - spreading wealth around in terms of employment and providing people with a living they can fairly earn.
To throw a wrench in that tired metaphor: a rising tide may raise all ships, but a fat lot of good that does to the poor, if it's only the well-of that can afford to buy a boat.
Even the poor do better when there's more jobs available, more job mobility, more housing, more stores, etc. All things that are created by wealthy companies and individuals.
Everyone, including our poorest, benefit from a growing economy.
We just have to examine our average poverty-level person, and compare them to poverty-level persons of other nations to understand this point.
Only if those jobs offer a livable wage. If instead they are McJobs that result in workers spending more than they earn (e.g. SNAP), then poor people are doing worse, and it's a net-negative on society.
Why are people stagnating instead of moving up? That's a really good question.
And most importantly, how do you account for the fact that in the U.S. there are about 53 million people in low wage jobs, but only about 33 million high school and college students? What are those other 20 million workers “supposed to” be?
If you are not "supposed" to earn a living wage, then the job should not exist. It's a simple matter of supply and demand: if you can't afford to pay your laborers a living wage, you have obviously failed as a company because you are unable to exist without slave labor.
> This misses the reason so-called McJobs don't pay a "living" wage.
Yes, this reason is called "profit". They pay so little because it is legal to do so, and people would rather work three jobs than see their kids starve.
> You're supposed to develop skills and move up in the working world.
If everyone moves up, who is going to do those jobs? And how exactly are you supposed to develop those skills if you have to work three jobs just to survive? There are only so many hours in a day, you know.
It's a difficult question to answer thoroughly, but there should be a few obvious factors. Most of the labor market is effectively priced out of acquiring higher valued skills/degrees that would improve their career. Their opportunities for advancement are laughable.
So, then, why is that?
Also parent: Why are people stagnating instead of moving up? It's a real puzzle.
No I'm not. I know exactly the point you were making. I'm disputing it.
The problem is the devil is in the details, and both the tired metaphor and your defense of it leave those details unspecified.
There is no good faith argument that exists to prove this incorrect.
> other economic articles, statistics, etc
Ah well, you're wrong. "other economic articles, statistics, etc" clearly do not support this.
I mean, "what can be asserted without evidence can also be dismissed without evidence." but lets bring the citations:
> trickle-down economics has never been advocated by any economist
https://en.wikipedia.org/wiki/Trickle-down_economics#Economi...
Did you know that?
I don’t mean to trivialize the complicated nature of the matter, with the effects of the world wars and globalization + many other factors, it is hard to separate things, but it really does not seem all that difficult to argue that trickle down economics is not better than what we were doing before and to do so in good faith.
Of course, the actual goal of trickle down economics was to concentrate wealth and power into the hands of a few and in that regard it is undeniably a success.
[0]: https://www.pewresearch.org/short-reads/2018/08/07/for-most-...
The nation's poorest are not provided with a fairly-earned living. They are working themselves to death while not even earning enough to survive, and they can't get any other job because those "smaller companies" have been killed by the behemoths outcompeting them by using exploitative labor practices.
Complete nonsense. You can look at the real-world effects.
Or the economists, who have done so and do not support it at all: https://en.wikipedia.org/wiki/Trickle-down_economics#Economi...
The citations that you want are linked there. Are you seriously saying that the whole "Economics" section of the Wikipedia article on trickle-down economics is "not good faith"?
Trickle down is a failure at its stated aims. It does not work. It never worked, and now people have noticed.
> A rising tide obviously raises all ships
A metaphor proves nothing. I might as well say "when money is concerned, no it doesn't: it's every man for himself" and leave it at that.
Let me ask you one thing in addition: can you explain why "trickle-down" economics is superior to "trickle-up" economics: where the money goes directly to those poorest who need it, cutting out the middle-men; and then when they spend it until it inevitably trickles up to businesses and the more well-off?
How does does "trickle-down" economics compare to that?
[0] https://www.cbsnews.com/news/tax-cuts-rich-50-years-no-trick...
Oh how far we’ve come since the economy of the 1960s.
- Your access to mRNA vaccines
- Your access to cleaner air due to electric car adoption
- Ditto for energy security and renewable sources of electricity
- Your chance of dying in a car going down due to new safety features
- Your access to crazy advanced cancer treatments that are making progress at almost miraculous paces
- Your much improved ability to work from home, cutting out ~2 hours of commuting each day
By every metric, the world is DRAMATICALLY better today for virtually everyone than it was in 1960, and the same from 1960 to 1900, and so on.
The pace things are improving is exponential.
If you think we're all worse off, maybe you're depressed. Or maybe you actually are worse off - but most people aren't...
If you're staying "stagnant" and the world is getting better, you're better off.
Even if you're declining, you can be better off.
If you think poor people in the US and Europe have it rough today, you should read up about what it was like to be a normal person in the 1600s in Europe.
If you think poor people have it rough today in California, you should read up on what it was like being poor in California in the 80s and 90s.
Etc.
The average lower middle class family today has it better off than nobility in the 1700s.
The fact that we're better off than people in the 1600s does not contradict what I wrote.
> The average lower middle class family today has it better off than nobility in the 1700s.
But in many countries is worse off than a couple of decades ago.
Unless your definition of rich is literally everyone in the US and Europe (which could be a fair definition) - then I disagree.
If things were improving "exponentially" like you claim, our lifespan would be accelerating and these "miraculous" treatments would allow us to live 100s of years. What's actually happening is our lifespan is not increasing, and in some years has been decreasing.
>>maybe you're depressed
But if these "miraculous" "exponential" medical improvements were real, we would expect to see less and less people who were depressed every decade. Instead, depression rates have been increasing.
One might also suggest if the world were DRAMATICALLY better as you claim, depression rates would be going down, not going up.
Now if you get leukemia in 2023, it's something close to a 70% survival rate over 5 years with significantly better treatments.
That seems dramatic to me.
It's drug overdoses, addiction, car accidents.
[0]: https://dqydj.com/average-median-top-individual-income-perce...
>Median individual income in the United States was $46,001. It is up from $44,225 in 2021.
The graph shows 2022 with a median income of $46,001. That means the 2022 data hasn't been "adjusted for CPI" because duh. When you adjust for CPI you choose a reference year which can't be anything but nominal and other years are brought to the same price level. This means that the $44,225 from 2021 have been adjusted upwards to $46,303. You can disregard the 2021 numbers, just as clipsy did (he only posted numbers for 2022), and just click your way to the 2021 post if you want the nominal numbers for 2021.
Ain't disputing that, but that's an outlier because it's a government provided thing, at least where I live.
But look at the rest of those things from a POV of people from lower and middle classes:
> - Your access to cleaner air due to electric car adoption
Yeah someday, maybe; right now it only means my perfectly good car is no longer good, and I have to somehow find money to replace it - and since this tech is new, there aren't many cheap used replacements available.
> - Ditto for energy security and renewable sources of electricity
Energy security? That's not what TV says. Renewables? You mean like those PV scam companies popping up everywhere? Or government forcing me to replace my cheap heat source with an expensive one?
> - Your chance of dying in a car going down due to new safety features
Feels like a pretty remote risk at this point (if it weren't, people wouldn't be driving at all). But sure, nice that safety improves over time, even if I'm always 10-20 years behind on the features.
> - Your access to crazy advanced cancer treatments that are making progress at almost miraculous paces
US: what access? Can't exactly afford it.
EU: what access? The queues are so long I'll die before my appointment comes up.
> - Your much improved ability to work from home, cutting out ~2 hours of commuting each day
That's thanks to COVID dragging the market kicking and screaming into this new reality, and with the pandemic over, the businesses are trying to decide which jobs to force back into office, and which to offshore. Neither is really a win.
(Also, it was hardly an ability - everyone was forced into it. Commute doesn't look all that bad compared to two working parents and all the kids trying to simultaneously remote-work and remote-learn in an apartment not sized for this.)
> By every metric, the world is DRAMATICALLY better today for virtually everyone than it was in 1960
What about it no longer being possible for most couples to live on a single income?
> maybe you're depressed
Funny you should mention depression - yes, support for dealing with it is better than ever, but it's also not accessible to most.
By your metrics, it'd be hard to argue that things aren't getting worse in last decade. I'm not arguing things are worse now, just that you chose bad measures.
You're off your tree.
Coal usage is at an all time high while the climate is collapsing. We're living on an exponential growing crisis is maybe what you should be saying.
For the vast majority of people in the world hasn't changed enough to have any noticeable impact on their lives.
However, just because it's good, doesn't mean it couldn't be better. I think this all the time - why can't the rich be rich without inflicting cruelty and suffering on people? You can have your millions, just give us healthcare, housing, public transit, vacation time, and fair pay, and stop dumping chemicals in the water, torturing animals, warming the planet, addicting folks to opioids, and promoting guns and the use of personal vehicles.
We don't have to imagine or fantasize about improvements the US could make - we have an example right in front of us with many social democracies in Europe. When a car backfires, the French don't assume it's an active shooter. When a Dane gets into an accident, they don't take a taxi to hospital. When your CEO gets trolled on Twitter and decides to fire 70% of the staff, you don't have to worry about it because you have an employment contract, and he simply can't.
We have to do better.
Yes, Europe was impacted too, but this chart doesn't show how much, relatively speaking.
The latter probably worked out better.
Doing fiscal austerity isn't bad if your monetary policy keeps AD stable. Doing the opposite and spending more is also not really bad as long as monetary policy is correct.
The US had bad monetary policy that was partly responsible for the recession of 2008/2009 but corrected it eventually. The Eurozone never corrected in and held to an extreme tight monetary policy for years and at the same time doing austerity.
And that simply can't work, if your AD is collapsing, trying to save enough to pay back huge nominal debt is simply impossible.
Yanis Varoufakis who was Finance Minister in Greek proposed debt payments indexed to NGDP, so that if AD was going down they would have to have less debt payment. But this was rejected by
Countries with their own currency, like Sweden, Switzerland and so on did better despite having many of the same pressures and not going on fiscal spending spree.
I think it does make some sense for the government to invest in infrastructure during a recession. But not because of the Keynesian thinking of pushing up AD, but rather because it just make sense invest in infrastructure and its slightly cheaper during a recession.
As a student in 2007, I started being an avid follower of what Big Tech was doing and was flabbergasted that local tech enterprises didn't seem to notice or change anything. In CS at university they didn't teach programming (only as an aside) but all the funny theoretical OOP fluff that the community rightfully started ditching and frowning upon.
Given software is slowly eating everything, I am not surprised in the result. Probably 7/10 of my fellow CS students will not be remotely able to explain how a given software works under the hood.
That's quite alarming.
Having said that the bootcamp I was a part of was hosted at (not really run by...) a local US university. I've worked with computer science graduates from there, good people, capable ... but man many of them should have had a semester of a bootcamp IMO, on top of their more traditional comp sci education.
I would jump at the chance to get a formal comp sci education, but I think all universities could use a heavy dose of “practical application” type courses.
Am I understanding this correctly that students don't get programming assignments?
Btw: Though I enjoyed Maths much more than CS, I wouldn't have understood Linear Algebra without watching the MIT Open Courseware thingy by Gilbert Strang. I think that's saying a lot about the German art of teaching (at least at that time).
If you ask me, they should make programming the fabric of almost all exercises/tasks, be it in math, cs or sth else along the lines. This would, however, require professors who are in to that kind of stuff and most preferred singing powerpoint-karaoke.
'IBAN' is a bank account number. So you had to have a bank account - most people have one. The 'ticket' is actually a subscription.
There are now 11 million owners of a subscription of a Deutschlandticket. Start was 1st May 2023.
1. Germany has no energy sources. USA had blown up the pipelines delivering cheap energy from Russia that German industry needs badly (so, German industry has been closing and has declining output since), also in just as brain-dead move Germany closed all its nuclear plants.
2. USA is deliberately suffocating German economy. First, dieselgate. Then, "fine" for Deutsche Bank for "provoking crisis of 2008". Then making Germany loose access to cheap energy and providing money to German industrial companies that want to move their plants from Germany (where they have no future due to lack of energy and other resources that were imported from Russia) to USA.
> USA had blown up the pipelines delivering cheap energy from Russia
Well, did they? I know this theory but AFAIK they could trace it back to some people in Ukrainian military. Western secret services (afair from Netherlands) even warned them twice that this was being planned but they didn’t react.
> USA is deliberately suffocating German economy.
Sorry, but those are ALL mistakes made by Germans themselves. They have been cheating, they have been lobbying the German governments to ease transformation cost for short-sighted profit, the (conservative) German governments acted to slow down renewables while quitting nuclear power earlier than planned. I think it’s not a coincidence that Putin started the war on Ukraine just at the time, Germany phased out its last nuclear power plants. It’s all stupidity on the German side, esp. when Merkel is still claiming that “she always knew who Putin really was”.
Such operation can't be performed by amateurs from a rented yacht. It requires experience and resources available only to few countries on Earth.
Also, it was just a version published by Western media without any hard evidence.
> Sorry, but those are ALL mistakes made by Germans themselves.
It's not possible to tell if they are unless there's an investigation, but there would be never such an investigation because Germany is an occupied country for 78 years.
It's quite clear from the consequences, that Olaf Sholz, Annalena Baerbock, and other German politics do things that affect German industry and economics negatively at the same time improving US economy and making Germany more dependent on US.
Let me just say one thing: It doesn't necessarily take the US for German leadership to shoot their feet.
"USA is deliberately suffocating German economy."
This is just patently false.
But German economy is actually fine, moving slow and steady is their way and it works for them. I also don't really think universities should spend so much time on "programming", they are not vocational training programs. I wrote software and got paid for it before I studied, and didn't go to a university to learn that. If there's one thing German society can do with young people it's to teach them to take more risks. But programming can be learned from a book.
The universities and colleges around the world have not adopted to the new reality where knowledge up to Master Degree level is essentially freely available to everyone with an internet connection.
But colleges are still needed - if only for human reasons. And that's where I believe they should emphasize. A place where young people discover what they want to do and weigh their options. Instead of being assigned a major and mostly determined coursework.
Why don’t I like it? “Source: International Monetary Fund” !! Fantastic. That’s like quoting a scientific breakthrough and saying Source: MIT. Which of the many artifacts they’ve recently released did it come from? I scrolled through the first three or four pages of IMF pubs, checked all of the titles that I thought may have contained the figure or similar data but no dice.
Is it too much to ask for a standard citation including the publication title and date, too?
I went looking because another comment suggested that maybe Brexit made the Eurozone numbers look particularly bad. But I don’t think that’s the case: the WSJ article particularly calls out UK citizens as similarly being worse off.
But after all that looking I couldn’t ultimately tell you whether or not the Brexit hypothesis is correct.
Meanwhile some Eurozone countries like Greece, Italy and Spain actually saw a decline.
Hard not to draw such conclusions when your set includes all the troubled countries and none of the fast growing ones.
That isn't some coincidence. The biggest beneficiary of the Eurozone relies on the suffering of its less successful members and this is ultimately reflected by the fact that poorer countries in the Eurozone don't catch up with the rest of the EU and in fact the opposite happens. Meanwhile for EU countries outside the Eurozone it is smooth sailing because they don't have to suffer for the benefit of a country that is role playing as the hero of the Eurozone.
With this I'm glad my country doesn't qualify - I'll take that any day vs having monetary policy tied to that of a very different economy.
EE countries which adopted the Euro did quite good as well. For instance growth in Poland lagged significantly behind Estonia or Lithuania in the last 10 years or so.
IMO this is a better comparison than with Poland and the Baltics since Poland is a massive country and has 5x the population so there are a lot more factors at play.
The EU is aging rapidly. Whereas the US had a minor baby-boom with Millenials - there was no equivalent in the EU. So even without any slowdown in labor productivity or even reduction in QOL, the ratio of people participating in the workforce is much lower in Europe.
Unfortunately that does not make it the best place to live.
Sure she had enough to eat and wasn’t going to be homeless. But she decided that life really wasn’t very exciting and she had no opportunity for growth whatsoever, just waiting for her boss to retire so she could take over her similarly boring job. But hey she could take double the vacation that an average US employee gets!
If you start cutting out this and that country from the EU then you need to cut out Mississippi and Idaho from the US. People always compare the US holistically but conveniently pick and choose which part of the Eurozone they want when it benefits their argument.
Dirty little secret in the US is that for very many people, there's no opportunity for growth whatsoever either. It's a relatively small section of society that even gets access to that opportunity. A lot of people in the US would trade their 'exciting' life of working 80+ hours a day to barely be able to pay the bills for the boring job your sister left.
> But hey she could take double the vacation that an average US employee gets!
Uh, if she could take vacation _at all_ she was already head and shoulders above a huge chunk of the workforce in the US.
I’m American but I’ve been an expat most of my adult life. I love the rest of the world. But Americans simply do not realize how good they have it.
Remember assumptions make an ass out of you and I. I've lived a big chunk of my life outside the US. I have plenty of experience with life outside the US. I also have plenty of experience with life in the US, including that outside the wealthy insula of the major cities.
I don't think Australia is the nicest country to live in by any means, but it's far better to be middle class or lower class here than in the US.
Sadly, there are a large number of people who cannot do that whether from drugs, trauma, natural inability, etc.
But it's hard to get a 1:1 comparison because the data in Europe on things like homelessness is shockingly poor. Most of the major European cities have strong dispersion/anti-camping laws. Because homelessness is kept more out of sight in Europe, it doesn't draw as much attention.
EDIT: Also, a large part of "quality of life" has more to do with the structure of european country populations. They are old , cohesive and mostly conformist societies that tend to help each other in times of need, something that the US, which is individualistic country made of immigrants can never do. This creates a more safe environment to live, but it is not an excuse for lackluster economic performance.
My evidence of this assertion is that millions more EU citizens emigrate to the USA than the other way. If Europe was that great then skilled Americans would be lining up to go. But they aren’t and in fact skilled people from all over the planet cone to the USA in droves.
Europe, not only Eurozone, lag in absolute numbers of economic activity but the life quality is not that different from the US and arguably it’s even better depending on what is important for you. An appendicitis generates more economic activity in the US but Europeans die les from it.
On the other hand, Europe does lag on post soviet era tech(that’s anything seen mainstream adoption since 90’s) and the contenders for US are China, Taiwan an India.
China, Taiwan, and India might be at the frontlines on some tech but their societies are facing political and demographic problems in much different ways than the west.
I’m afraid our world is poised for a dramatic change as every country is screwed in a different way and people see no easy way out.
i.e. Life expectancy, work length, income, spending, etc.
Metrics has to be objectively measurable, otherwise they would have a huge subjective bias. Some people can be happy and enjoy life in almost any circumstances - but that is much harder to measure across societies and you'll end up with scams like "happiest country on Earth".
There's definitely a quantity/quality difference. Things in Germany are just nicer. But at a certain point, the "niceness" of things doesn't matter to you much anymore when you are trying to raise a family of 4 in a 800 sq ft apartment.
I think cultural expectations are more defining, for example Turks are frustrated with the healthcare in Europe because they expect to see a specialist ASAP even for the smallest thing and they want antibiotics for it. In Germany you won’t get all the antibiotics you want unless you actually need it and you won’t be seen by a professor just because you feel like. Germany will try to make you live healthier life through preventative medicine, Turkey will try to give you a 5 minutes access to a doctor and infrastructure quickly.
I’m hearing about Americans complaining on similar stuff. IIRC Americans feel neglected during pregnancy in Germany despite that the US infant mortality rate is almost twice the German one.
Not that it's inherently inferior, but part of the reason healthcare is so expensive in America is that Americans (perhaps a bit spoiled by our own prosperity) demand lots of care. My wife's sister saw specialists 11 different times last year because she was not happy with the advice. And I would not say this is an entirely unheard of extreme.
In the US, if someone gets denied anything from their doctor, it is somewhat of a scandal.
In Turkey, where I lived for quite a while, the modus operandi is that you go to the hospital to demand something. If the government ones don't make you happy you go to the private one and they will pour all the tests you can handle.
Once I thought I'm having a heart attack and rushed to the ER in a private hospital. Turns out I'm just a bit dehydrated, so drinking water would do it but the doctor asked me if I would like an IV. I was appalled because my expectation is that if I need an IV the doc should just do it, he should't ask me. I asked if I need it, he said it's not necessary but can speed up the recovery. It turns out, Turks like to go to the hospital to get an IV when they don't feel very well, they just like that a professional is taking care of them even if they don't actually need a medical intervention and they will get better spontaneously as they rest and the private hospitals provide this service.
I like the European way better.
To my understanding, infant mortality has less to do with quality of care, and a lot more to do with environmental and genetic factors. The biggest causes of infant mortality in the US are congenital defects and complications due to premature birth.
There seem to be enough confounding factors that I'd question comparing infant mortality rates across borders to begin with.
To my understanding, infant mortality has less to do with quality of care, and a lot more to do with environmental and genetic factors. The biggest causes of infant mortality in the US are congenital defects and complications due to premature birth.
Consider California, the state has seen a decline in maternal mortality by 65% while the rest of the US, especially states like Alabama have seen consistent increases of 700%+ in the same time period,
CMQCC was founded in 2006 at Stanford University School of Medicine together with the State of California in response to rising maternal mortality and morbidity rates. Since CMQCC’s inception, California has seen maternal mortality decline by 65 percent between 2006 to 2016, while the national maternal mortality rate continued to rise.
Alabama's maternal mortality rate in 2012 was 6.9 per 100,000, 49.1 per 100,000 in 2016, and is now likely excess of that from 2023 onwards. The state suffers from what's now being called a, Maternity Care Desert, https://www.montgomeryadvertiser.com/story/news/local/alabam...
https://www.alreporter.com/2020/11/22/nearly-70-percent-of-a...
Actions matter. Even if there's a genetic factor that leads to a predisposition to an event, how that event is handled and, indeed, how prevention is addressed — a genetic predisposition is a probability that something will occur not a certainty — makes all the difference.
Just because someone was genetically predisposed to get a heart attack doesn't mean that their death from a heart attack was due to their "genetics."
Suppose the ambulance took 3 hours to arrive, only to deliver poorly trained paramedics that failed to administer care leading to the patient's death on a gurney en route to the hospital. In that case, the patient hasn't died due to genetics. They've been killed because of catastrophic, systemic failure. A systematic failure to address their elevated risk, a failure to prevent or mitigate said risk, and then a catastrophic failure in handling the event precipitated from this unmitigated risk.
There seem to be enough confounding factors that I'd question comparing infant mortality rates across borders to begin with.
Those sound like issues which could be avoided with better healthcare, no? Stuff like that can often be trivially caught with proper screening.
Economic limitations have never stopped people from having kids and it is often the poorer people who have more kids.
GDP is most often used by the government of a single country to measure its economic health.
All the tings you mentioned still should have a meaning, positive impact on the lives of the populace.
How much does the FED has printed vs the ECB?
How much of EU's economy was affected by the US extraterritoriality legislation?
https://www.rferl.org/a/1095057.html
https://twitter.com/RnaudBertrand/status/1665370246126125060
The chart says "Eurozone". Either you
1) didn't read the chart, or
2) don't know that the UK was never a part of the Eurozone.
If 1), read the discussed thing the next time before discussing it.
If 2), never speak about economics in public again.
I love when someone correct me because I don't like carrying incorrect knowledge with me
Your hostile and condescending tone however wasn't needed
The health of the people is the supreme law (Salus populi suprema lex esto).
I mean, the outrage! How dare they!
When are we going to get over this obssession that your value is your job? Eh?
A vast number of unskilled labor jobs being able to provide solid employment for the vast majority of people are not coming back. AI is going to eat a bunch more jobs. These jobs are not coming back.
Either we're going to figure this out together or human society is in for a very bad time.
One of the biggest economies in the World leaving the designation of the EU surely is relevant here.
Furthermore, any EU figures will have been badly skewed by the UK having left the EU since 2008. Comparisons should take this into account.
The following diagram might be worth sending to the author(s): https://commons.wikimedia.org/wiki/File:Supranational_Europe... ("Euler diagram of supranational European Bodies")
I'm not going to comment on the correct levels, as I have no clue, but one thing that feels certainly wrong is complexity of taxation. This gets exploited by a small percentage of people while leaves a large percentage afraid to venture.
US
2013 16.83 trillion dollars
2023 32.33 trillion dollars
EU
2013 13.19 trillion dollars
2023 14.5 trillion dollars
USA 41.5
EU 29.6
Debt is often used as a justification for spending cuts, often targeting the middle and lower classes
It's a weakth shift. The EU could double it's debt and give the money to the companies and would be on the same level as the US, GDP and debt wise.
A lot this growth just doesn't reflect in most people quality of live, mostly because of health care and land use.
Tons of people are richer, but a lot of the extra consumption goes to health care and cars (suburban living).
In 2008, a euro was worth ~$1.60, now it's around 1:1
Every once in a while big things happen though (world wars break out, trade deals are signed, etc.) and in those cases it can pay to have the largest GDP.
I think this is finally being noticed everywhere, and expect that EU will change radically as an institution by the end of the decade
Apple is just crazy profitable.
Outdoor museum?! I couldn't really find a definition for this term.
These outdoor museums are actually preserved villages where people live in these old conditions because they feel good that way. Somehow like today's Europe. Progress is limited and regulated or stopped.
Highly relevant: "The Evitable Conflct" <https://np.reddit.com/r/MapPorn/comments/24zvhe/the_world_di...> by Isaac Asimov
Also does this comparison factor in uk’s departure?
what i imply is that its not like an ordinary US citizen has 2x better quality of life than an ordinary EU citizen, I would strongly suggest that is far from the truth as i worked and lived in both US and EU and earned top dollar in both
Just as an example, Germany has the highest electricity prices in the world (20% higher than second place Italy), and starting April, switched to being a net electricity importer, after it shut down the last remaining nuclear power plants.
Go to a chemicals conference these days and half the research is on managing blackouts. In the best case your plant, which is the same CAPEX in Europe as it is the US, is producing 25% less.
There's only so much sugar-coating you can do. The atmosphere's like a funeral.
Unfortunately the people who downvoted me must be thinking differently. Would have loved so much to hear their reasoning and POV on the matter, especially if they disagree with my hypothesis, I’m always willing to learn.
In the EU you have older, more refined fascism: a political party subtly (or not so subtly) intimating an entire group of people is a huge problem, a return to "strong leader" values, etc. It's perhaps a bit more seductive, and deliberately so: public perception would be more poor if it was as violence-heavy as it is in the US.
You have to remember the EU is where fascism came from. It was a huge deal before WW2 and in essence it has never really left, it has just gotten better at rebranding.
Eventually you will see the hot new fascism trends in the EU transported to the US as well, it is how fashion works.
N.B.: I'm not a fan (of fascism or other regressive policies), which is perhaps not obvious. I just wanted to make clear that while the US has many problems and they are horrible, most of them are just "well the EU is doing this now so why aren't they???" and you can sort that out by waiting a generation or two. It's how the two areas started out (for ease of dialogue I'm ignoring how the US actually started out, that's a can of worms for another day), after all.
Mentally visualize adding in 3.1 trillion to EU 2023 to control for Brexit and the difference becomes a lot less stark (though still interesting).
People are weird about Europe.
Slightly unrelated: anytime I see an article about dollars impending tumble as the world's reserve currency, I remember an article I read back in 2008 claiming the Euro was overtaking the dollar, because… rappers were flashing them in their videos. I'd be interested to see how much you could align different currencies in rap videos with currency strengths.
[0]: https://pbs.twimg.com/media/F1P4FUgWAAIMWAd?format=jpg&name=...
That rather makes it poor communication, no?
https://www.poundsterlinglive.com/images/graphs/EU-vs-UK-gro...