Economic Life in Europe versus the USA
(snip)"It's almost as if high taxes, heavy regulation, and an extensive dole sap people's desire to work hard, making the society as a whole worse off so that those policies don't just redistribute wealth, but actually destroy it. That's probably because they do, and have done so everywhere they're tried. People are usually pointing to some socialist paradise or other where life is wonderful, but -- not to put too fine a point on it -- those places are basically a lie. Socialism just doesn't work, anywhere, for very long. (snip)"
Re: Economic Life in Europe versus the USA
This is horrible journalism...
1. Why use per-capita private consumption rather than GDP? Because it suits the writer to point out how "rich" we are...When what it really shows is that we don't save. GDP figures still show an advantage to the US, but much less, and...
2. The US-Europe gap in living standards has closed dramatically over the last 50 years. So while I agree that it's weird how well the Europeans do given the strong disincentives to create new companies, the reality is that their model seems to work OK.
3. The growth in the US relative to Europe is because of 1. population growth (which the author points out but apparently fails to realize that it runs directly counter to his GDP growth argument--OF COURSE your economy grows faster if, all other things being equal, your population is growing faster) and 2. longer hours worked.
That's not to say that the guy's basic thought is wrong, just that his "evidence" is weak.
Re: Economic Life in Europe versus the USA
Quote:
Originally Posted by Melonie
http://www.msnbc.msn.com/id/3395977/
(snip)"It's almost as if high taxes, heavy regulation, and an extensive dole sap people's desire to work hard, making the society as a whole worse off ..."
I think that is very true. I saw a survey a couple of months ago that compared the attitudes of Americans with Europeans. Americans had a much more positive attitude about their future than Europeans.
Re: Economic Life in Europe versus the USA
Quote:
1. Why use per-capita private consumption rather than GDP? Because it suits the writer to point out how "rich" we are...When what it really shows is that we don't save. GDP figures still show an advantage to the US, but much less, and...
... because per-capita private consumption corresponds directly to relative standards of living. GDP numbers basically push aside issues of relative taxation levels, differences in embedded VAT taxes etc. which benefits the europeans in such a comparison
Quote:
2. The US-Europe gap in living standards has closed dramatically over the last 50 years. So while I agree that it's weird how well the Europeans do given the strong disincentives to create new companies, the reality is that their model seems to work OK.
Oh really ! You'd better try selling that to Germany's 15% unemployed, or France's workers who have just been told that their 35 hour workweeks can/will now extend to 48 hours, or untold numbers of europeans waiting in line to hopefully receive gov't health care before their medical condition kills them. Doesn't sound like such a fantastic model to me.
Re: Economic Life in Europe versus the USA
Melonie,
1. On your first point, current living standards paid for by a propensity to consume rather than save don't impress me. The fact that pretty much every international agency I'm aware of uses per-capita GDP as a measure of wealth would argue for that over personal consumption. Don't we all spend a lot of time talking about how Americans consume TOO MUCH and save too little? But then when it suits this writer, Hey Presto! Look at how much better off we are than Europeans...Because we spend more than they do!
2. On your second point...There are all sorts of economic statistics along the lines of the ones you provide that can be used on either side of the argument (people in the US without health coverage, infant mortality, 35-hour workweeks or even 48-hour workweeks are somehow rougher than we have it here?). Germany's 15% unemployed are just as likely to be happily on the dole as they are to be wishing they could get a job at Wal-Mart.
Again, I'm not disagreeing with the basic premise that the American economic model is more sensible than the Western European one (though it can probably be argued either way by very intelligent people, and is). I'm just pointing out that this writer had a strong agenda to push, and did it by using unorthodox metrics and/or ascribing results from complex systems to particular factors based on his own narrative preference, not any rigorous statistical analysis.