The economic comparison between the EU and the USA

OK I have three links that go in depth on the subject. I am interested in this as I do not see the EU as being the economic superpower than some do. I feel that the socialistic governments can not compete in the world market unless they change.

China is the economy waiting to explode IMHO.


Country Amount
1. United States $10.45 trillion (2002 est.)
2. China $5.989 trillion (2002 est.)
3. Japan $3.651 trillion (2002 est.)
4. India $2.664 trillion (2002 est.)
5. Germany $2.16 trillion (2002 est.)
6. France $1.558 trillion (2002 est.)
7. United Kingdom $1.528 trillion (2002 est.)
8. Italy $1.455 trillion (2002 est.)
9. Russia $1.409 trillion (2002 est.)
10. Brazil $1.376 trillion (2002 est.)
11. Korea, South $941.5 billion (2002 est.)
12. Canada $934.1 billion (2002 est.)
13. Mexico $924.4 billion (2002 est.)
14. Spain $850.7 billion (2002 est.)
15. Indonesia $714.2 billion (2002 est.)
16. Australia $525.5 billion (2002 est.)
17. Turkey $489.7 billion (2002 est.)
18. Iran $458.3 billion (2002 est.)
19. Thailand $445.8 billion (2002 est.)
20. Netherlands $437.8 billion (2002 est.)







PART I - EU VERSUS USA � Economic Clout?


THIS REPORT IS ABOUT THE FACT that per capita GDP is lower in most of the countries of Europe than in most of the states of the USA. That France, Italy and Germany have less per capita GDP than all but five of the states of the USA is probably something that messrs Chirac, Schr�der and Berlusconi don�t wish to know. Or that G�ran Persson is prime minister of a country which, if it were a part of the USA, would rank as one of the very poorest states in that Union? Can this be true? Is it plausible? It is both true and plausible. America�s GDP is far higher than Europe�s and has been so for a long time now, and the American economy has been growing faster than the economies of many European countries in recent decades, not least those of countries like France, Germany and Sweden. The US recession, with GDP growth rates of 1 or 2 per cent, represents almost boom conditions in Germany, for example. Europe may have its Eiffel Tower in Paris, its Coliseum in Rome, fine roads in Germany and social security systems in Sweden, but it will take more than past achievements to cope with the economic challenges which many European countries are facing. Economic challenges which among other things will be brought about by demographic developments and will impose heavy strains on comprehensive, publicly funded welfare systems.


The tax rates in the socialist countries have the drawback of hurting productivity, and for these reasons, the US citizen has more 'disposable' income.


High incomes coupled with low taxes mean high private consumption in the USA So much for GDP comparisons. Private consumption is another important welfare indicator. Basically this is a question of people deciding their consumption for themselves, the possibility of riding in a new, roadworthy car, the food we eat, the number of pleasant and time-saving restaurant visits, the possibility of experiencing creative leisure, and so on. Access to the new products of technical progress is every bit as important today as it ever has been. Take, for example, the importance of having access to a computer and the Internet, or being able to �buy time� by consuming good precooked food or services.


But the United States have so many poor and homeless people right?


It is better being poor in a rich country than in a poor one.Poverty is a highly relative concept. As we saw in the preceding section, for example, 40 per cent of all Swedish households would rank among low-income households in the USA, and an even greater number in the poorer European countries would be classed as low income earnings by the American definition. In an affluent economy, in other words, it is not unlikely that those perceived as poor in an international perspective are relatively well off. The media image of the American poor is that they have great difficulties to contend with, that they are dossers, junkies and in various ways marginalised. There are of course such groups in the USA, and they are relatively large, but � and this is an important �but� � such groups exist in European countries too. There is also another image of poverty in the USA, namely that the great majority of those considered to be poor have a relatively good material standard of living. Examples are given below.


But the poor live in shacks in the United States and its capitalistic economy based on rewarding the rich right?


Another indicator of the relatively good material standard of living among the American poor can be obtained by comparing dwelling space among poor households in the USA with average dwelling space in Europe. Table 3:3 compares dwelling space in various countries. Average total dwelling space in Europe is just under 1,000 sq. ft. In the USA it is 1,875 sq. ft for the average household and 1,200 sq. ft for poor households. Adjusting for size of household, one finds that poor households in the USA have slightly more dwelling space than the average European. The average American household has a home that is 80 per cent larger than its average European counterpart. Europeans, in other words, are more crowded in an American perspective.


So why is the EU not catching up with the Unites States now that it has the benefits of the �EU�?

High taxes are not without their problems. When we turn to consider the impact of economic policy on growth, it is hard not to notice that one particular factor above all is essentially different in large parts of Europe compared with the USA, namely the expansion of the political sphere in general and taxes and the size of the public sector in particular. Economists may disagree as to the demonstrability of a connection between, say, pressure of taxation and growth � and concerning the strength of that connection, if it does exist � but one cannot altogether ignore the fact that Europe (or at least, large parts of it) has chosen an essentially different path from the USA, at the same as the American economy has grown considerably faster. We belong to the economists who believe that this is not a coincidence and that, on the contrary there is a relatively strong connection involved here.

But don�t the Europeans get more vacation and other perks that US workers do not get?

The Americans work on the job, while the Europeans work at their leisure. Another reason sometimes given for the higher quantifiable material prosperity of the USA is that the American works more. According to this hypothesis, poor development in Europe is connected, not so much with bad economics as with Europeans themselves opting to work less. Viewed in this light, Europe�s lower level of material prosperity results from its own choice to have more leisure. In order for the differences in work input to pose a real problem for comparisons of per capita GDP between the USA and Europe, at least two conditions have to be met.

EU VERSUS USA in raw economic statistics








PART II - "The Future of Transatlantic Relations, EU vs. USA?" So what next and do we continue to bicker between ourselves in the next decade? Is it economically viable to continue this path?


Economics also drives the transatlantic relationship. We are each other's largest investors and trading partners. Trade in goods and services between the U.S. and European Union amounted to $548 billion in 2002. Sales of U.S. affiliates in Europe for that same period were $1.4 trillion, and EU affiliates' sales in the U.S. were comparable. Our combined investment in each other's economies was $1,376 billion. Both trade and investment levels are growing relative to GDP levels. EU affiliates in the U.S. employ 4.4 million people in the States, and U.S. companies employ 4.1 million people in the EU. If we include indirect employment, over 12 million people depend on transatlantic trade and investment for their jobs.

We depend on each other for economic growth. Over the seven years from 1995 to 2002, the US accounted for fully 96% of the cumulative increase in world GDP. Nevertheless, the global economy cannot fly with only one engine. This shared interest in economic growth alone should keep us working together.

Future of Transatlantic Relations







Europe vs. America Germany edges out Arkansas in per capita GDP.
The growing split between the U.S. and Europe has been much in the news, mostly on foreign policy. But less well understood is the gap in economic growth and standards of living. Now comes a European report that puts the American advantage in surprisingly stark relief.
The study, "The EU vs. USA," was done by a pair of economists--Fredrik Bergstrom and Robert Gidehag--for the Swedish think tank Timbro. It found that if Europe were part of the U.S., only tiny Luxembourg could rival the richest of the 50 American states in gross domestic product per capita. Most European countries would rank below the U.S. average, as the chart below shows.

opinionjournal.com..." target='_blank' class='tabOff'/>

Europe vs. America in economic clout




PART III � CHINA - As I have said, I think China is the one to watch out for in the next 10-20 years

In 2000, the United States exported US$781.1 billion (12.3 percent of world exports - 11 percent year-to-year growth) and imported $1.2576 trillion (18.9 percent of world imports - 19 percent year-to-year growth). Germany exported $551.5 billion (8.7 percent of world exports - 1 percent year-to-year growth) and imported $502.8 billion (7.5 percent of world imports - 6 percent year-to-year growth). Japan exported $479.2 billion (7.5 percent of world exports - 14 percent year-to-year growth) and imported $379.5 billion (5.7 percent of world imports - 22 percent year-to-year growth). France exported $298.1 billion (4.7 percent of world exports - 1 percent year-to-year decline) and imported $305.4 billion (4.6 percent of world imports - 4 percent year-to-year growth). The United Kingdom exported $337 billion (5.1 percent of world export - 5 percent year-to-year growth) and imported $284.1 billion (4.5 percent of world imports - 6 percent year-to-year growth).

China exported $249.3 (3.9 percent of world exports - 28 percent year-to-year growth) and imported $225.1 billion (3.4 percent of world imports - 36 percent year-to-year growth). Hong Kong exported $214.2 billion (3.2 percent of world exports- 19 percent year-to-year growth) and imported $202.4 billion (3.2 percent of world imports - 16 percent year-to-year growth).

China has considerable growth rates compared to ANY other country.


So just how big is the Chinese economy?

The USA is the world's largest economy, with annual output of $11 trillion. China, No. 2 at $6.5 trillion, is the fastest-growing economy, barreling ahead at average annual growth rates of 9% a year. In 2002, China surpassed the USA as the world's leading destination for foreign investment.


Does this have any historical basis?

Yet China isn't emerging so much as re-emerging. The Chinese economy outperformed Western Europe's for more than 1,000 years, until the 16th century. After that, China stagnated, and its economic output stayed virtually flat for three centuries. But even as recently as 1820, China was responsible for 33% of world GDP. By comparison, America's share of world output peaked in 1950 at 27%.


So what does the next 10 years or so look like?


China's economic clout. It shouldn't come as a surprise that China's scale is finally translating into economic clout, says Stephen Green, a China specialist and economist at the Royal Institute of International Affairs in London. After all, there are 4.5 times more Chinese (1.3 billion) than Americans (300 million) and six times more Chinese workers � 760 million to 130 million.
By 2020, China will have a middle class of 200 million, vs. 186 million for the USA, says Ming-Jer Chen, a business strategy expert at the University of Virginia's Darden Graduate School of Business Administration. At that point, he predicts, America's service-based economy will find it is competing on new fronts with the Chinese � battling for dominance in banking, insurance, telecommunications and other service industries.

So what does this mean to the United States and the EU? Well I do not have the information on the EU but I bet it exists somewhere. You need to look into it if you live in the EU.
More worrisome, the USA ran a $124 billion trade deficit with China last year, its biggest gap ever with any country. And while Chinese imports of U.S. goods are growing at a faster rate than U.S. imports from China, the overall trade gap is going to be even bigger this year.
If anything, Yale's Garten says, China's impact on the U.S. economy is only going to grow. The two countries will struggle to make room for one another, he says.
"We've never been exposed to an onslaught of this magnitude," he says. "And what we're seeing now are just the initial convulsions."
China and its unstoppable economy


[edit on 11-11-2004 by edsinger]

[edit on 14-11-2004 by edsinger]

GDP per capita is no measure of economic development or living standards at all. What would you try to prove with it?

Try the following alternatives to get your comparisons alongside GDP:

* quarterly GDP growth in each economy, to look at what is going on in economic cycles
* relative currency valuations (USD vs Euro, over a period of interest)
* balance of trade
* budget deficits.

Unfortunately the US is at the bottom of the barrel as a result of Bush domestic and foreign policy.

The political flavor of any nation has not much to do with its national competitive advantage at all. That all comes down to resource advantages and trade negotiations.

Originally posted by MaskedAvatar
GDP per capita is no measure of economic development or living standards at all. What would you try to prove with it?

SO you do not see the Arkansas vs Germany comparison as meeing anything? What the article was saying is that the GDP of the typical Arkansas resident is higher than a German one.


And the EU is a powerhouse? Have you ever been to Arkansas? Personally I like it but that is a telling statistic......

And China? that one is spooky.

Russia may start pricing oil in euros rather than dollars which will not help the US economy very much also europe will have a bigger population esp if Turkey was to join. I agree with u about the holidays and work ethic though, we are pretty lazy in the EU The japs are by far the hardest working and richest (per capita) in the world and their economy is second only to the US, not bad for a population of only 120 million.

my :censored: is bigger than your's, ed.

Mod Edit: See above

[edit on 11/12/04 by FredT]

Originally posted by edsinger
I feel that the socialistic governments can not compete in the world market unless they change.

I agree, there's still at least socialist republic of vietnam, poor bastards. I'm glad there are no socialist republics in europe anymore. Socialism gets no special treatment in any european country. What social security exists has been democratically voted to exist.

Originally posted by edsinger
THIS REPORT IS ABOUT THE FACT that per capita GDP is lower in most of the countries of Europe than in most of the states of the USA.

When you're counting GDP, the income of one Bill Gates divides as reasonable income for 10 000 poor. That doesn't mean the poor actually ever see the money.

Originally posted by edsinger
Economic challenges which among other things will be brought about by demographic developments and will impose heavy strains on comprehensive, publicly funded welfare systems.

Of course the demographic developments strain the welfare system. What do you suggest, let them die ? Perhaps we could build undeground bunkers where we throw our old, sick and poor who can't afford treatment.So we can eat in the fine restaurants, drive luxury cars etc.

Originally posted by edsinger
Private consumption is another important welfare indicator. Basically this is a question of people deciding their consumption for themselves, the possibility of riding in a new, roadworthy car...

Ah yes, the pleasures we already talked about. Rome had orgies and grape peeler slaves, must've been nice...

Originally posted by edsinger
Take, for example, the importance of having access to a computer and the Internet,

www.nationmaster.com...

Originally posted by edsinger
or being able to “buy time” by consuming good precooked food or services.

How nice of you to remind, I must go and buy my live chicken and stone axe from the bazaar...NOT. Come on, I eat half my meals out (precooked ?) and I'm part of the poorest 20%. Rest are microwave meals (ok, they aren't sometimes that good but I don't think they're anywhere)

Originally posted by edsinger
It is better being poor in a rich country than in a poor one.Poverty is a highly relative concept.

Poverty is very highly relative concept indeed and I'd pick Sweden or Finland over US anytime if I'd have to choose where to be poor. Wait, I am poor in Finland !... Stupid me chatting here on the internet, watching movies, getting healthcare and studying in university to become more productive citizen, when I could be picking oranges for 2$/hour...

Originally posted by edsinger
Average total dwelling space in Europe is just under 1,000 sq. ft. In the USA it is 1,875 sq. ft for the average household and 1,200 sq. ft for poor households. Adjusting for size of household, one finds that poor households in the USA have slightly more dwelling space than the average European. The average American household has a home that is 80 per cent larger than its average European counterpart. Europeans, in other words, are more crowded in an American perspective.

Oh come on. I'll start packing my old clothes in aid packages to Hong Kong and Japan if that's how it's counted...

Originally posted by edsinger
But less well understood is the gap in economic growth and standards of living. Now comes a European report that puts the American advantage in surprisingly stark relief. It found that if Europe were part of the U.S., only tiny Luxembourg could rival the richest of the 50 American states in gross domestic product per capita. Most European countries would rank below the U.S. average, as the chart below shows.

It appears it still remains less well understood. GDP != standards of living.
www.infoplease.com...

Originally posted by edsinger
The study, "The EU vs. USA," was done by a pair of economists--Fredrik Bergstrom and Robert Gidehag--for the Swedish think tank Timbro.

From timbro website:
Our mission is to advance an agenda of reform based on our core values – individual liberty, economic freedom, and an open society.
Don't hold your breath when waiting the unbiased source of the year award.

You're right about China though.


Please don't take any hard feelings from my comments, they weren't meant to be offensive but rather formed to deliver the point. If I had been softer, they would've been very boring. I had to make a point, GDP does not equal quality of living. Not even close.

I don't have anything against US. I don't oppose reforms or more rational taxation or more incentives to work in europe. I wouldn't oppose some libertarianismization(?). But I just have to make a point that GDP doesn't tell anything about how the income is distributed or even how it effects the quality of life in general.

If you still feel people are suffering to death in countries with high taxes. I can show you around Finland if you decide to visit here yourself to see the "poverty".


[edit on 12-11-2004 by vibetic]

I am not mad at all! I just posted this therad in reply to the EU Seperpower thread. I wanted to see the numbers myself. Look all I am saying is that Socialism doesnt not help productivity.

As for the poor in Finland compared to the US, I have this to say, Europeans somehow have the idea that the US is cruel to the poor and that is just not the case. We have "created" a poor class that can not get out of it BECAUSE of the dependancy that the Federal Government created. The Churchs used to feed the poor and the poor worked to get better and not take the handouts, Great Depression etc. Now they get government checks on a per child basis, so what do they do? have more children.

Medical Care - US hospitals CAN NOT refuse treatment. So what do we have? People without emergencies clogging the ER's.

There should be a "safety net" but not one that breeds dependence.

All in all, I would say that the United States is somewhat a socialists country now, the late 70's being the peak. When reagan started the other way, the economy grew leaps and bounds. Even Clinton saw the wisdom of getting folks off the government roles and that is one of the few things that I will say that Clinton did a good job on. Then Again, it is not hard to do in times of Government revenue growth.

You cannot compare this simply on the numbers Ed.

Quite a fair proportion of the European 'qualty of life' is derived from public collective provision which you Americans must fund as individuals.

As for this 'socialist' tag you love so dearly?
I'm afraid it is 'socialism' only in the context of the current US definition of the word. ie not actually 'socialism' at all.

Europe is not 'socialist now (and has rarely ever come close to it) just as the USA has never been 'socialist' by any correct definition of the term.

If you think the US health care system is genuinely 'free at the point of use' as ours is I suggest you are much mistaken.

....and as for this dependance cobblers? You carry on supping up this garbage which simply actually means blaming the poor for being poor all you like....you're the ones who have to live with the swelling 'underclass'. Enjoy.

Look I didnt say we GET all FREE medical care, but again ER's MUST take patients.....which is wasteful, Medicade is available to the poor, it is low-low middle wage earners that have NO insurance.

Socialism to be is "Governement" provides the majority of services, the EU in general is more than the US.

You think I dislike the poor? I was raised poor and worked my way to middle class debt. The poor need taken care of but the abuse ones see's and the waste in tax dollars is what pisses me off, not poor people. They need ways to become tax payers if you ask me....


You dont live here so you really cant understand what I mean.

i don't really understand the point of this article. if anything it's really an example of the cultural differences between europe and the us. i think the eu will always "lag behind" the us economically, because their values are in different places. do you think newspapers in france and germany are asking, "why aren't we as good as the us?" the us is a more capitalistic society, so in turn it will probably always have better economic numbers. What these numbers dont tell is we're sitting in more traffic, we're breathing dirtier air, our cities and suburbs are swapping open space for strip malls and home depots, advertising is creeping it's way inot practically every aspect of our lives, etc, etc.

I wrote this thread becuase of some comments in the EU Superpower thread, I wanted to know just what the difference was. Not that one is better than the other but some concrete numbers that we could all look at. That's all , no harm meant...

Originally posted by edsinger
Not that one is better than the other but some concrete numbers that we could all look at. That's all , no harm meant...

Not sure if this is part of what you're looking for edsinger, but here are some numbers that may be of interest.

Germany and France i know 100 percent are socialist ( i been there ) dont know about the rest of europe tho. I shouldnt say europes sociailism is like russias or chinas, in a way alittle socialism is good for the poor and standard of living, but when it comes to have to get permits to by ropes or taxes on radio, thats kinda to far.

Originally posted by edsinger
And the EU is a powerhouse? Have you ever been to Arkansas? Personally I like it but that is a telling statistic......

I LIVE in Arkansas and it has one of the fastest growing economies in the nation. I hate to break it to you ed but we all dont live in shacks with pigs in the yard and 14 kids with our wife/sister like it shows in the movies.


I live in a nice home with 3 bedrooms and 3-4 hundred channels and cable hook-up for my Computer and do it on about 30 grand a year. The cost of living here is maybe HALF of what it is elsewere. How many places do you know where you can buy a three bedroom (nice) for less than 30,000?
I got another shock for you......me and my wife arent related either

[edit on 13-11-2004 by Amuk]

Originally posted by entile
Germany and France i know 100 percent are socialist ( i been there )

- Then you don't know the real meaning of the term 'socialist'.

Germany and France are not 'socialist' they are capitalist economies.

There is more than one 'version' of capitalism.
The USA does not hold the patent.

dont know about the rest of europe tho.

- The rest of Europe operates a modern mixed economy too with slight variations in the 'mix' (ie the levels of state funding).

I shouldnt say europes sociailism is like russias or chinas,

- Too right. They are nothing like the 'old' Russian or Chinese systems of 'socialism.
Neither Russia nor China afford much state provision at all now, they are quite capitalist in their methods now.

in a way alittle socialism is good for the poor and standard of living, but when it comes to have to get permits to by ropes or taxes on radio, thats kinda to far.

- You say po-tay-to and I say po-ta-to.
All countries have pain-in-the-a$$ technicalities no matter what 'system' they claim to operate.

In the case of licence fees.....usually only for TV not radio, we are used to a (small.....certainly compared to the cost of satellite TV) licence fee for our public broacasting companies. We get a much higher standard of TV and radio as a result compared to a completely ccommercial sector.

Being European, I can assure you that when we are "stung on the nose", we become really annoying. But you reported some very interesting facts. I was reading the paper this morning (a very pro-EU one) and the economic growth indicators they reported were simply astounding. In 2005, the US GDP growth is expected to be AT LEAST three time that of the whole EU. But if you break down the various members, the situation changes radically. For example Ireland's GDP is expected to grow at least twice as the USA's one, and could even rival China's growth (which is expected to slow down). The UK's GDP is expected to grow more or less as the USA's. Spain's growth has slowed down considerably and their ascending phase is expected to come to an end in the next two-three years. But when you look at three "founding fathers" (France, Germany and Italy), the GDP growth is expected to be near 0. It's alarming, since these three countries cannot afford to cut down taxes to promote growth, nor to use public money to help the economy out. If you take a French or Italian newspaper, you can see that a 1.0% growth is seen as desiderable, and the governments keep on promising that in "two or three years time" the crisis will be over and the GDP will soar again. In short, these three leading economies hae come to a grinding halt, and won't restart soon. Germany and Italy have lots of problems in common: a very industrialized half of the country with the other half living on welfare (West/East in Germany and North/South in Italy), a quickly aging population (pensions are paid by the state), an obsolete and expensive health system and an enormous national debt. France's problems are deeper and lay in her economic structure, loss of traditional markets and decreasing product quality. Also, you rightly said that Europens work less than Americans. That's because they are forced to. Industries cannot afford to build more, because they don't sell as they used to, and piling goods in a warehouse is not good for your budget. There are very strong unions, ready to strike at the slightest sign of changing working conditions. Moreover, consider that in many countries even shops run a 10am-5pm schedule...

Very intersting perspective m8, the numbers in which you speak are strange indeed. Why is Ireland booming so much? Did the de-socialize some or what?

What surprises me in these numbers is Mexico! China makes sense and as I said was the economy to watch out for...damn 6 Trillion already!




Country Amount
1. United States $10.45 trillion (2002 est.)
2. China $5.989 trillion (2002 est.)
3. Japan $3.651 trillion (2002 est.)
4. India $2.664 trillion (2002 est.)
5. Germany $2.16 trillion (2002 est.)
6. France $1.558 trillion (2002 est.)
7. United Kingdom $1.528 trillion (2002 est.)
8. Italy $1.455 trillion (2002 est.)
9. Russia $1.409 trillion (2002 est.)
10. Brazil $1.376 trillion (2002 est.)
11. Korea, South $941.5 billion (2002 est.)
12. Canada $934.1 billion (2002 est.)
13. Mexico $924.4 billion (2002 est.)
14. Spain $850.7 billion (2002 est.)
15. Indonesia $714.2 billion (2002 est.)
16. Australia $525.5 billion (2002 est.)
17. Turkey $489.7 billion (2002 est.)
18. Iran $458.3 billion (2002 est.)
19. Thailand $445.8 billion (2002 est.)
20. Netherlands $437.8 billion (2002 est.)

Originally posted by edsinger
Very intersting perspective m8, the numbers in which you speak are strange indeed. Why is Ireland booming so much? Did the de-socialize some or what?

- Well according to you Ed they must be the epitome of a socialist/neo-marxist economy.

By the way Ed; your growth comparisons don't seem to take account of 'real' growth (the bald growth figure minus inflation).
When you do that you find that growth (particularly France and Germany's) isn't quite the 'flat-line' story made out.....nor other people's quite the glossy success story 1st claimed.
It's low but it is there as inflation is practically non-existant in Europe.....we risk it's counter-part deflation far more than inflation.
In any case Germany's problems relate entirely to her re-unification. This will take a few years to complete yet but it will happen.





[edit on 16-11-2004 by sminkeypinkey]

Originally posted by sminkeypinkey
In any case Germany's problems relate entirely to her re-unification. This will take a few years to complete yet but it will happen.

For the most part I would agree that unification was very expensive and taxing to say the least, but Germany and France also face other problems that mainly stem from the entitlements that have been promised and the roadblocks through taxation that impede growth.

It will take time, but it is already getting to the point that the Europeans will have to modify something or they will end up like Japan has been for the better part of 10 years --- stagnant.