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Originally Posted by UNDERBYTE
Interesting economic breakdown on the EU vs US. - The US Poor are not the same as the EU poor and like I said our poor are on par with the EU middle class
http://www.timbro.com/euvsusa/pdf/EU_vs_USA_English.pdf
All of the EU faces the same economic problem as france -
France hard line on the rioters was great to see |
There are some things to remember about the USA that need to be taken into context when comparing us to other countries. As an American, it is unfortunate that they are not so flattering, but they need to be accounted for in any comparison.
The United States median household is 42 grand or so, and in Europe it is somewhat less. But an important thing to remember with the USA is we live beyond our means. This discrepancy shows up in both the goverment's deficit, and the trade deficit. We import about half a TRILLION more dollars worth of goodies and services than we export. We pay for that with nothing more than paper, we didn't earn that excess. An interesting circle happens here that will get more vicious with the passing years. Our goverment runs a similiar sized deficit. It raises that debt by selling bonds.
A country with all these excess dollars (China and Japan for instance) then offloads them by buying U.S. Treasuries. So, we Americans get to have cake and eat it to. We get an extra half trillion of goodies for "free" and then these countries turn around and take that money and give it back to us, so we can then do what we do these days in the gov. Basically that amounts to buying Viagra for gramps, cutting checks to various interests, and bombing Iraqis. Whether you politically agree or disagree, that is what we physically do with that money. This is also important to remember when we think of the high tax burden European countries tend to have, because they pay for virtually all of their goverment. Americans get a big messy goverment too, but finance 25% of it every year instead of paying for it. If we actually PAID for all our goverment, our tax burden would be similiar to Europe's average.
But now we Americans are paying back our free loan, over the lifetime of those bonds, plus interest. The Federal goverment's interest payments on the national debt is now bigger than all other expenditures except for Social Security, DoD, and Medicare. Every other thing the gov has going, NASA, HUD, the DOT, DOE, FAA, FCC, CIA, FBI, the alphabet soup goes on, does not spend even half as much money COMBINED as we spend on deficit financing as it is today. This will only become more acute as we continually borrow more money. Another thing you see happening is those excess dollars start coming back to this country to acquire American assets. Lenovo's purchase of IBM's PC biz comes to mind, or Petrochina's attempted purchase of Unocal is another example.
Coming and going, we inflate our economy by about a trillion dollars (~10% of GDP) per year. Subtract that scheme we have right now, and jack up taxes so we actually PAY for our goverment instead of using rock-bottom financing from the People's Bank of China, and you have a financial situation that basically is like, well...France.
Americans have a sweet deal going right now with the rest of the world where we basically get to spend money we print, and spend it twice. No free lunch like that lasts forever, and unless we get our own financial house in order the French will be having a nice chuckle at our mess in thirty years or so. END RANT