U.S. GDP grew at a 4.9% annual pace in the third quarter, better than expected

I look at Spain's labor market and I see a country that is massively failing: Triple the unemployment rate. People out of college there, with good majors, that end up making far less than what they'd to at McDonalds in the US. Young adults can't afford housing either, but not because they have massive student debt, or high healthcare costs, or extreme housing prices, but because salaries are pretty sad. My brother does bioinformatics and has a Ph.D, and he'd make 4x what he does, today, doing the same job in the massive, booming metropolis that is... St Louis, Missouri. He lives with our retired mother, and they can barely make ends meet.

Ultimately the higher growth advantage for the US is long lasting too: If your GDP growth is 0.5% higher than your neighbor, every single year, compound interest makes the difference very stark after a few decades... and a place like Spain already starts 30% poorer.

So yes, I'd still argue that the US is ahead in many areas. The riskiest issue is the difficulty of reforms: Good luck reforming higher education or healthcare, even though other countries have working systems that are better. But even though all it takes to see the advantages of change is to look a little bit, progress seems very difficult, as there's just so much money and power on the line in keeping the status quo. But that might be the theme of the last couple of decades in all democracies: Unwillingness to reform in the face of dysfunction.

"Everyone wants to be the king of the hill. That's international. But the number of aspiring kings always dwarfs the number of available hills. So in this country, we build more hills. We're geniuses, in fact, at building more hills."

I don't think your non-sequitur bears even a passing resemblance to the subject.

I think the whole point of the thread you're replying on is mentioning the individualism and personal freedom that's the US's cultural basis, and that has a profound impact on the well-being of those who feel the need to be the best of what they do, regardless if what that might be.

A while ago I stumbled upon an Instagram account of a middle-age man who had a bunch of videos of him juggling random stuff in his back yard, and he made it his point to stress that he was the best at what he did and he made a whole career out of it. Such a random thing, and I'm sure there weren't that many competitors for the title of best pillow juggler, but that fit definitely the description of someone making his own hill to be its king.

https://millerestateandelderlaw.com/medicaid-out-of-pocket-c...

Seems can vary by state too

https://www.medicaid.gov/medicaid/cost-sharing/out-pocket-co...

I suppose I'm actually rather fortunate to some degree; a lot of my issues could likely be resolved with a hip replacement, and I'm told the latest ones are very robust and can lead to nearly full natural function, but I haven't quite built up the courage to replace part of my skeleton with metal and plastic. As I say, I'm rather happily employed these days, but I've also been throught the odd layoff, so I know how precarious things can be.

When people cannot easily change jobs they deal with worse working conditions and worse pay. I have seen people work for the same employer for over a decade because they would have to restart their greencard process otherwise.

Will that still be true for people born here fifty years from now? I have my doubts.

When I hear people complain online about the US, it is very common for them to have a deep understanding of problems in the US, but very superficial understanding of problems in other developed nations. European countries also have lots of problems with housing, healthcare, the environment, racism, the rise of the far right, etc. There are some problems that are uniquely american, like mass shootings.

Being an informed citizen isn't just understanding the problems in your country. If you wan't to be a part of positive change, you need to understand what's working and what's not working in other comparable countries as well.

Even as a Canadian who immigrated to the U.S. (who unfortunately lives in Canada again now), I didn't realize how good I had it until I had given up my U.S. residence

https://en.wikipedia.org/wiki/Demographics_of_the_United_Sta... https://en.wikipedia.org/wiki/Demographics_of_Germany

The US is one of the most attractive places for capital in the world, which encourages a great deal of immigration to the US.

The number of opportunities in tech and the speed with which new ones arise can't be compared.

Look at the latest trend - AI. Not only did the initial boost come from openAI (US) its adoption by the biggest tech companies like Google, Microsoft, Nvidia, Apple etc - all American and all investing Billions.

But that's not even the most 'special' aspect of the US ( I'm sure SAP will jump in big into AI ) It's the hundreds of startups that are either starting or pivoting into the trend.

Now, this doesn't mean that this latest iteration of AI will be world-changing, it could turn out to be a complete bust. But it's this constant churn, the striving to be on the cutting edge, the rise and fall of dreams that makes the US 'special'.

Nope, and in fact the American Dream is exactly this - it's saying that if you work hard / are lucky / have talents / have connections / have resources (the more you have the higher chances you have), you too can rise above the common person and join the ruling class of

> Slave owners, robber barons, industrialists, tech owners

Of course this is out of reach for most people, and for the vast majority of people, as soon as they climb out of the common class, they immediately look down upon the common people, since they are now above the peasants. This is human nature. Everyone who complains about the rich will do the same thing as the rich as soon as they become rich

"It deserves to be remarked, perhaps, that it is in the progressive state, while the society is advancing to the further acquisition, rather than when it has acquired its full complement of riches, that the condition of the labouring poor, of the great body of the people, seems to be the happiest and the most comfortable. It is hard in the stationary, and miserable in the declining state. The progressive state is, in reality, the cheerful and the hearty state to all the different orders of the society; the stationary is dull; the declining melancholy."

Not that it should come at the expense of exploitation, and Smith would likely agree. He was critical of rent seekers and slavery and was very much interested in the well being of common people.

His observation, I believe, it also applicable at a smaller scale when looking at companies. Growing companies are great to work for with lots of excitement, perks, and new opportunities, even for average or mediocre employees. Stagnant companies are difficult and melancholy, not much advancement, raises are small or non existent. Declining ones are miserable as everyone is fighting for survival.

America was not founded for the common people. It was founded by the exceptional people who risked everything to come to this hostile continent in search of freedom from oppression. Freedom from serfdom. Freedom from debt. Freedom from religious persecution. Freedom to live how they wanted to!

America's population has forgotten its morals and what it means to be American. We are like the fat people in wall-e floating in our bubble, complaining at our minor inconveniences, and not knowing where we're going. We are fucked unless we turn this ship around.

This reads like a straw man. Just because some place arguably has issues that does not mean that it it just as bad as the one you're living on, or that your life won't improve your life by adopting or emulating the good examples.

Healthcare is a great example. I'm convinced that the average US citizen has absolutely no idea of the critical positive impact on quality of life and well-being that socialized healthcare has on all citizens, directly and indirectly. It goes way deeper than not risking going bankrupt for being in a car accident, or being able to treat your nagging minor health issue without having to tap a credit line. It affects things like being confident that your loved ones will have all the care they need if something bad and unfortunate happens to them, regardless of who you are ir where your career is at the moment.

I don't think your rebuttal addresses the data I linked at all or supports the parent point at all

Upward mobility is definitely down and the USA is no longer the world leader by some measurements. I get that won't persuade everyone but I'm happy to debate on that data instead of an unrelated discussion point even if it is interesting.

Actually the data I've seen states one is way more likely to go from the bottom 20% to the top 20% in many other countries than if you were doing it in the USA.

I'm open to any counter data, but I've read these same numbers in several sources and you can tease it out of my first link.

Also, my partner is American and has family here. I keep trying to convince her to give foreign living a try, and she's traveled with me a bunch now, but it's still a lot to ask of someone who's only ever lived in their home country. Me, I've spent a lot of time traveling to different countries and have a pretty broad perspective to draw from. It's harder for someone who's never really done that. Still, I hope to coax her into it over time!

Unless you get married, how exactly would you propose an average American emigrate to Germany or Japan, for example?

There's a ton stopping someone. It's not impossible, but it can take years of work, require a change of careers, and you have to say goodbye to a lot of family and friends.

Data from 2020, but it's probably not changed much: https://www.pewresearch.org/social-trends/2020/01/09/trends-...

2023 graph: https://www.gspublishing.com/content/research/en/reports/202... (from https://www.gspublishing.com/content/research/en/reports/202...)

With the massive increases in inflation and housing costs, the middle class and below can't really keep up. A 5% increase in earning power for them is like a few thousand dollars a year (that they have to immediately spend on housing and services), vs millions or billions for capitalists that can then reinvest in growth sectors (AI and whatnot).

I read an interesting point recently: Austria's 100 wealthiest families have two thirds of the country's wealth, and zero have earned their money from technology; they've all inherited it.

How different would the same list be for Germany? One, perhaps two families earned their fortunes from tech?

Um... The most liberal European places are more restrictive than conservative states. Florida tried a fifteen week ban and that was controversial.

Meanwhile abortion is illegal, unconstitutional in fact, in Germany and only decriminalized before fifteen weeks. After that, it's only decriminalized for certain cases.

On top of that, tech emerging as a big industry which forms a big part of the whole economic output of a country, has led to Europe losing out to US. Although only China through thier protectionism has been safe from that.

You can see this in the commentary about UK politics, where they don't have money to fund NHS and NHS wages haven't grown which has bogged down their healthcare system. Most of the manufacturing ecosystem is completely degraded. Productivity is at a complete toss as well, as they are not even able to build high speed rail well now, which for a social net country like UK should be of paramount importance.

To combat this, they have increased taxation, either through freezing slabs or moving down tax slabs. This penalises people in high wage professions and it leads to loss of competitiveness.

That only leaves you with immigrants from beyond the EU. Most of those who have any skills are going to try to get into the US. The ones that can't are probably going to try and get residency / citizenship in canada and get in via a TN visa.

Europe is left with the remainder, and unskilled migrants from cultures which frankly have a much harder time integrating into a western one. Over the long term it's a pretty dire situation.

- heatlhcare isn't what it used to be. Sure, it's free but it can take months to see some doctors, or even a dentist.

- retirement: the pension system isn't good. Most people will get less than 1.5K a month, and not before 64. The effects of the various pension reforms aren't visible yet but they will increase old people poverty.

- safety: this is political and people hold strong opinions on this, but my feeling is that poverty is on the rise, there are more and more unemployed young refugees...

More speculatively, I think Europe lacks natural resources and this is going to bite us more than the US.

https://archive.ph/dqbDH

> The eurozone economy grew about 6% over the past 15 years, measured in dollars, compared with 82% for the U.S., according to International Monetary Fund data. That has left the average EU country poorer per head than every U.S. state except Idaho and Mississippi, according to a report this month by the European Centre for International Political Economy, a Brussels-based independent think tank. If the current trend continues, by 2035 the gap between economic output per capita in the U.S. and EU will be as large as that between Japan and Ecuador today, the report said.

> The European Union now accounts for about 18% of all global consumption spending, compared with 28% for America. Fifteen years ago, the EU and the U.S. each represented about a quarter of that total.

> Adjusted for inflation and purchasing power, wages have declined by about 3% since 2019 in Germany, by 3.5% in Italy and Spain and by 6% in Greece. Real wages in the U.S. have increased by about 6% over the same period, according to OECD data.

Healthcare and vacations in the US are often reasonable for the developed world if you are, e.g., a highly-paid tech worker or other elite worker or, in some jurisdictions, a public sector worker (especially one with many years in, for vacations)

For the other, oh, 80% of the US working population, though, that's not true.

https://www.federalreserve.gov/monetarypolicy/monetary-polic...

“Over time, growth in GDP causes inflation, which if left unchecked, runs the risk of morphing into hyperinflation. Most economists today agree that a small amount of inflation, about 2% a year, is more beneficial than detrimental to the economy.”

https://www.investopedia.com/articles/06/gdpinflation.asp

Google creates Google Ireland to hold their IP, then Google Ireland "charges" Google Germany.

The problem is, that GDP doesn't stay in Ireland. It flows to the US.

Every once in a while you hear about this, apartments where you build it mostly off-site in a factory and then assemble the blocks on-site, supposed to be somewhat cheaper and much faster (for the last stage anyway), but for some reason it seems to stay experimental.

I would be curious how much the productivity increase from people being less sick, and the increase in personal spending and investment would offset the profits of leaches like private insurance companies

However, if it starts to shrink - and you're leveraged to your neck in debt - buckle up.

E.g., if I'm one of the few who pays all of the taxes I'm supposed to, does that just make me a self-righteous chump?

Or is there much point in me properly disposing of household lead, fiberglass insulation, etc. when 99% of other users of the landfill ignore the rules?

That's really the key thing. What level is sustainable? I've come around to the idea that the main danger of deficit spending is inflation (because of the idea that government debt is private sector wealth).

The big levers the government have access to are spending and taxes. The first adds wealth, the second subtracts. In this way, government debt is really nothing like household debt that you and I have.

But if it's actually providing a boost to economic growth, it also means the debt isn't actually unsustainable. If you boost economic growth this year by 0.1%, and afterward it returns to previous growth rates, then the economy will stay 0.1% larger than it otherwise would have been perpetually. If your interest rates are comparable to the base line economic growth (true now, last decade they have been lower), and you take a twenty-year view, then taking on 5% of GDP in debt to generate a one off 1% growth boost to the economy is a no-brainer. The real issue is to understand when the government (vis a vis the private sector) actually can spend money to generate genuine extra growth, and when it cannot (e.g. if it only shifts growth that would happen anyway forward you would expect growth to dip after the initial boost, but that would be true whether the deficit spending stops or not).

The argument against debt is often not based in economic sense or sound science (remember the debacle when a widely cited study on the problems with high debt turned out to be based on an Excel mistake?). In my view, it's based on an aversion to the government having too much spending power. After all, a version of the argument, above was used by conservatives to sell tax cuts that were supposed to pay for themselves. They didn't because the tax cuts did not actually generate growth, they merely redistributed wealth to the top. For deficit spending, the evidence that it can boost economic growth is much more robust.

The real debt crisis will hit once countries start to seriously shrink...

There are all kinds of reasons why this figure might be politically influenced. The reality on the ground is we've had to make significant cuts to our standard of living just to maintain spending flat even with wage increases. The wage increases have been on the order of 3% per year and not tracking with inflation for both my wife and I.

So when you talk about numbers “you see coming out” you’re at least a year out of date.

I’m assuming you’re going to just start saying “the numbers aren’t real man”. But in that case why talk about the “numbers you see coming out”.

EDIT: I don't necessarily disagree, but it's important to not let general sentiment get in the way. Sentiment is often a lagging indicator.

https://fred.stlouisfed.org/series/FYFSGDA188S

However, to make things simpler assume you don't have cash, for example, because you are unemployed.

So, if you are making the mortgage payments using the credit card and the total CC payments this year alone are 8% of the value of the house, you can see problem.

Eventually, the debt becomes due, and no amount of house will repay the incurred debt.

So the relationship is, you may buy any house (assets) that grows in any amount, but if your CC hole is growing faster, you are actually worse than you started out.

If the government spends more, it should cause more work, which should lead to higher GDP.

This is one simple way to look at it.

If the government is spending more, but GDP isn't growing by the same, it might be a sign that the governments expenditures are wasted.

Now, I'm not saying that's happened, but it could be. Government spending is historically the most likely to be wasteful, in comparison to individual/retail/business spending.

I have "opinions", but if you are interested in this topic, rather than me dumping it here, it can be worth reading up a bit on GDP, then googling around for GDP criticisms. I think there's a sense in which it measures something useful, but it isn't measuring what people think it is and what the media sort of pushes it as meaning; it is correlated to the health of an economy but it is by no means a measure of the health of the economy, and the fact government expenditures are simply straight-up added to the GDP has such an obvious way for the government to manipulate the numbers that I can't hardly even call it an exploit. Whether they are doing that, I'll leave that to the reader to decide.

Another relatively obvious issue is that the GDP number waved around in the popular press is generally not adjusted for inflation. That's not just the US GDP in 2023, it's any GDP the press will talk about, anywhere and anytime, so I'm not trying to make any stealth political point here. It's something to be aware of in any context a "GDP" comes up, look to see if it's inflation-adjusted or not. Such measures exist and more serious economists definitely use them. The wikipedia page I linked to above has a wide variety of other interesting definitions and that's still a Wikipedia overview itself, of course, not the fullness of econometrics.

The more they spend, the more others earn, leads to higher GDP.

Not quite. The payback time will depend on the growth in government revenues, which should be correlated to GDP growth, but a fraction of it.

It will never default because it can just create the credit. That’s what the Federal Reserve did with its zero interest rate policy. It distorts the economy, and the economy can shrink and be torn apart, but the government can always pay its debt by simply printing the money.

The real problem lies with private debt, and that's what's actually leading to a default. When people default on their debt, they end up forfeiting property to the creditors. What we’re seeing now is a large scale transfer of property such houses and cars that people had bought, and so on, that they can no longer keep making payments on. this results in a transfer of income from the 90% to the 10%.

The wealth transfer means that the working majority is pushed ever further to the margins. US is already in a situation where around half the population has no meaningful savings.

https://www.cnbc.com/2023/10/03/americans-are-saving-less-in...

Having no savings puts people in a position where they're not able to absorb further unexpected expenses. This is what's making the economy so fragile.

Also, economic growth in U.S. is now mostly concentrated in lower income groups. It seems that high middle class (statistical one, i.e. top 10-20% of population - "people just out of poverty" if you look at it honestly), are on the losing side now. Hard numbers are hard to come by but once the tax season is over we will see them next year.

https://usafacts.org/articles/how-many-homeless-people-are-i...

There are fewer homeless than before 2008, which was a period of economic boom.

To pick an extreme to illustrate the point: if GDP shoots up 100%(!) but it's all a dozen people trading with each other a whole lot and everyone else is now impoverished, is that better? GDP is better! GDP/capita is better, too! But the economy is definitely worse.

Another exaggerated example to illustrate the point: if GDP is outpacing consumer inflation—let's say 4% growth in a quarter, and 2% inflation in the same—but only because we've made the "basket of goods" to calculate inflation qualitatively worse, and meanwhile several important things that aren't part of that basket have gone up 1,000% and everyone rightly reports feeling poorer—is the economy doing well?

Maybe "All Economics are Local" too.

Obviously neither of those are true in a general sense - but the local situation is what feels most important.

With regards to grocery prices, what does corporate greed have to do with the president?

As for the car, the FED has a big hand in interest rates, and yeah, Biden did choose to re-nominate Powell, but Powell was originally appointed by Trump, so I don't know how voters can really say the republican would have done better.

The American economy is bad for people under a certain line, yes. The question is why does the media always overplay the economy when Republicans are in power and downplay it when Democrats are?

The large majority of people are doing well. When people say the economy sucks they are largely not talking about their own economic situation. Most people believe that they, personally, are doing well, but that some nebulous "the economy" is doing badly. We have a nation of thriving people who believe everything is falling apart.

https://www.nytimes.com/2023/09/07/opinion/economy-inflation...

I'm obviously only looking at a small part of the overall US, but if we're going to go by what we as individuals see the numbers I'm personally seeing largely match the trends I see from the BLS.

Debtors really don't care about the deficit. There's not a lot of places to park large quantities of cash. Even if the US Treasury was offering a measly 1% most bond buyers would still take that over any higher yielding riskier debt. It still confounds the typical US taxpayer that other countries buy our sovereign debt because that is how they insure their currency.

But job switchers (rightly) give themselves the credit for their salary boost. OTOH the government gets the blame for inflation and job loss. It's a crap job, you get blamed for the bad stuff, but don't get credit for the good stuff.

Yes, I am fortunate enough to earn a middle-class income for my family. I grew up poor in a poor neighborhood with a lot of crime. Sometimes you can climb the ladder.

you can pay someone to dig ditches for no reason. then pay to fill them back. both count as legit GDP growth, even if the value of either action is $0

If a government takes out a loan to build a $100 million bridge, is that bridge any different from a $100 million bridge that was funded by taking money out of the coffers?

https://fred.stlouisfed.org/series/FYFSGDA188S

My experience in being able to see q Europe seeing a GP is way better than in the USA but I know this varies by where you live (even inside the USA)

[1] https://www.statista.com/statistics/268826/health-expenditur...

Here's what they think. Telling everyone to eat some charts while they're getting squeezed is not going to go over well.

So the situation with the US is that, their spendings on healthcare is gigantic percentage of their GDP and Germany is a distant second with the rest of the Europe and the world trailing behind. US also doesn't have much to show for that spending, all the health and longevity metrics are worse than Europe. The defence is usually that Americans are paying for R&D and UK, Europe and the 3rd world are freeloaders. The counterargument is that, US relies heavily on immigrant researches that were trained in those countries those they foot some of the bill for the R&D and non-trivial costs of the healthcare in US is in administrative costs and not drug or machinery that was R&D'ed in US.

So we can argue over the issue all they long but the fact remains that there's lots of accounting differences so it's not possible to compare GDP number to GDP number and if you compare other metrics about the output of that GDP, the USA lags quite a bit behind countries with much lower GDP or GDP per capita.

US of course has it's own unique strengths, making it the dominant country of the world.

It changes substantially, when PPP is used China surpasses the US with a significant margin.

The prices aren't too high the dollars are worth too little beacuse there are too many of them. Stop making more and prices will stabilize.

Most people now have super low mortgage rates, and could not afford to switch to a comparable home, because sticker prices have barely budged. This leads to a very tiny inventory of homes.

However, part do the reason that prices are staying high is that we are still under supplied on homes, and interest rates being high also means that construction starts will be way down, keeping those sticker prices higher for longer.

CPI does include food, fuel, and housing costs (though housing lags very significantly for a few reasons).