Tuesday, April 25, 2006

US - America's economy

Gerard Baker writing in the Times (UK) refutes all the doom and gloom about America's decline.

Think of it another way. In an era in which China embodies the hopes and fears of much of the developed world, the US, with a growth rate of half that of China’s, is adding roughly twice as much in absolute terms to global output as is the Middle Kingdom, with its GDP (depending on how you measure it) of between $2 trillion and $4 trillion and its growth of about 10 per cent.

Even when you account for the fact that US growth is not going to continue at 5 per cent, but will revert to its trend of more like 3.5 per cent per year, you are still talking about an economy adding more than $400 billion in inflation-adjusted terms every year (not quite Brazil or Australia, but significantly bigger than Switzerland or Belgium) .

That means that, on current trends, for at least the next decade the US will actually keep growing in total dollar or yuan numbers by a larger amount than will China (even if the yuan is substantially revalued, by the way). And beyond that ten-year horizon, can anybody really be confident that China will maintain its current rate of growth? (We haven’t even talked here about per capita GDP, where the US advantage will remain unapproachable for decades.) Think of it yet another way: at current economic and population growth rates, the United States — now about 30 per cent larger than the eurozone in GDP — will be twice the size of Europe’s economy in less than 15 years.

I give you this little statistical litany not just for its own intrinsic appeal, but as a healthful antidote to some of the wishful thinking about America’s inevitable decline you can read in the rest of the media.

There are and will continue to be problems but things are not as dire as the media would like you to believe.

Just think how much better off the world would be without the lying left wing media.

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