An Optimistic Look at the US Economy
May 11, 2023
Ronald Reagan won the 1980 election because of his upbeat creed, his optimism, and his sunny disposition, an attitude that contrasted to Jimmy Carter's beat-down-but-struggling talk.
Reagan told the American people, "America's best days are ahead of us," and they believed him. Jimmy Carter talked about a National Malaise, ways to cut the deficit, and how to get hostages out of Iran. The American people were aghast.
Warren Buffett says, "For 240 years, it has been a terrible mistake to bet against America. The babies being born in America today are the luckiest crop in history. America is still great."
Yet, pessimism ranks high today. Call it declension, declinism, or just plain negativity; it seems fashionable to knock the US economy. Yet, a few opinion writers see things different. For example, Jeff Jacoby, a Boston Globe columnist, wrote on April 28,
"Amid storms of angst about a recession, skyrocketing national debt, and high cost of housing, Americans seem more certain that the nation's economy is deteriorating, along with any hope that their children will be more fortunate than they were."
He counters, that this prevalent "economic pessimism is unwarranted. The US economy is not sputtering. It is lapping the field." In other words, it is winning the race.
Another columnist, Kevin D. Williamson, at The Dispatch, pointed out that in 1995, "The US economy accounted for almost a quarter of the economic output of the human race, about 24 percent. And today it is at that same 24 percent." No decline there.
Writers at The Economist, a magazine from the UK, printed an article on April 13, that they entitled, "America's economic outperformance is a marvel to behold." These are British opinion writers, who look across the pond and dare to say the truth about us.
They wrote, "The remarkable reality is that America remains the world's richest, most productive, and most innovative big economy."
They point out that, "in 1990, America accounted for 40% of the nominal GDP of the G7, the world's seven biggest advanced economies, including Japan and Germany. Today it accounts for 58%." Not a decline, but a sizeable jump forward.
In terms of Median Household Income, the five poorest states are from the former Confederacy: Alabama, Louisiana, Arkansas, West Virginia, and Mississippi.
The poorest of the fifty states, Mississippi, had a Median Household Income in 2019, of $45,792. That number ranks higher than that of New Zealand, the United Kingdom, France, Japan, the United Arab Emirates, or Italy.
How has the US economy achieved this degree of economic might and power? Kevin Williamson offered a handful of quick reasons: "America's physical size, its gigantic consumer market, its younger population, and a higher share of immigrants."
In addition, he points to the wonders of the US education system. "The US spends 37 percent more per student on education than does about three dozen other leading market democracies. One-third of working-age Americans have a college degree.
"Of the world's 15 top-ranked universities, 11 are in the US."
Also, Williamson looks deeper and sees the average American worker's productivity. "The average American worker produces more in goods and services per hour than workers in the European Union, Japan, Latin America, or the Middle East."
As for China, "an hour of labor by the average Chinese worker produces just one-fifth as much economic value as an hour of work by a typical American."
Williamson admits that "our politics are truly terrible." "On both the left and the right, free-market capitalism-the greatest engine of wealth creation and poverty eradication ever discovered-is being demonized."
Despite polarized politics, the US economy still runs and wins the world's economic race.
Readers, you can find the archives of my previous columns at my website, williamhbenson.com.