Wednesday, December 08, 2004
Are We Doing Something right?
If the European Union were a state in the USA it would belong to the poorest group of states. France, Italy, Great Britain and Germany have lower GDP per capita than all but four of the states in the United States. In fact, GDP per capita is lower in the vast majority of the EU-countries (EU 15) than in most of the individual American states. This puts Europeans at a level of prosperity on par with states such as Arkansas, Mississippi and West Virginia. Only the miniscule country of Luxembourg has higher per capita GDP than the average state in the USA. The results of the new study represent a grave critique of European economic policy.
You can download a pdf of the study here
Joey Tartakovsky with the Claremont Institute says:
This means that poorer U.S. states enjoy affluence comparable to that of richer European states—Denmark is equivalent to Kentucky—whether measured in terms of home ownership, or number of microwaves and cars possessed. “Material prosperity,” the authors write of the U.S., “is high and not associated with the material standard of living which many people in Europe probably associate with poverty. Good economic development, in other words, results in even poor people being relatively well off.”
By the 1880s, the U.S. had become the world’s richest nation (measured in per capita GDP). In the 1990s, U.S. growth was twice that of Europe’s, and three times that of Japan’s. The U.S. per capita income is now 55% higher than the EU-15 average, and 50% higher than Japan’s.
Here’s the not-so-secret recipe for achieving European-style stagnation and decline. First, combine high unemployment and aging populations to ensure that welfare costs far exceed worker contributions. Then, stuff with generous entitlements, massive tax burdens, rigid labor markets, and regulation-mad bureaucracies. For flavor, add dashes of socialism and right-wing paternalism. Bake. (For additional recipe ideas, consult Joy of Administrating by Ted Kennedy, or English departments everywhere.)