The US economy and the EU were the same size in 2008, the US is now nearly 2X

Still, if PPP GDP increases, with all else being equal (eg. stable population) it would imply the standard of living is increasing.

That is why PPP GDP captures a more accurate measure of the real world.

Said another way, what truly matters isn't "GDP growth", but changes in purchasing power/quality of life.

Cheap imports are great for consumers, but a currency losing 20% certainly doesn't mean its economy has magically contracted 20%. If anything a weakish currency stimulates internal economic activity as it's good for exports.

The US economy is also not nearly "twice that of the EU", in nominal terms either - it's about 50% bigger. The (silly) chart is for the eurozone.

Seriously, the US always had a somewhat bigger/stronger economy, but a cheap dollar at the time made nominal almost equal, which was misleading. Now, the US still has a slightly bigger economy, and has had better growth, while the price of the dollar makes it look like a massive difference, which is also misleading. The true output difference is high single digit. Why are you pretending otherwise?

The GDP wa invented by a russian working for US bureau of statistics during the great depression. It was a helpful measure to compare performance of different US evonomic sectors. It favors deficit spending to saving.

It is a very inadequate measure for people wealth in any developed economy.

Obviously, nominal GDP per capita matters for international vacations.

I've just started to read Graham Allison's Graham Allison (supposedly based on this article [1]) and the exact opposite remark is made at the beginning of that book, i.e. that one should use PPP numbers instead of nominal GDP numbers when looking at the quality of life.

[1] https://www.theatlantic.com/international/archive/2015/09/un...

https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locat...

Now, I have no idea what thebdifference between constant USD, current USD and the international versions are, and wpupd be happy if someone cpuod explain it since the differences are huge, but measured in curren international USD, the EU and US GDP charts move more or less in parallel with the EU one being a little bit lower. But of course, a chart that shows a huge delta developing makes for much better headlines, and more eyeballs on the article...

EDIT: Just played around some more, the numbers only allow for sensationalism whem using current USD, taling any other constant value the story is a lot different. And the root cause seems to be two periods, 2012 - 2014 when the EU GDP growth was significantly below US growth (it was negative for the EU in 2012 and 2013), and 2020 (EU -5.7, US -2.8). So, if everything it is old news, or worse just a wrong representation of data to justify headlines and narratives (looking at you WSJ, not some Twitter thread).

https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2...

GDP chart in constant 2015 USD:

https://data.worldbank.org/indicator/NY.GDP.MKTP.KD?location...

The common (and relevant measure) is real gdp growth or growth minus inflation. (And per capita if that is your concern.)

So can GDP.

> PPP isn’t a good measure for population’s wealth or quality of life especially for developed economies either.

Why isn't it a good measure? Why is it worse than pure GDP?

> The economy of the US is still twice that of the EU and its global purchasing power has also pretty much doubled.

The GDP of the US is twice of that of the EU. How does paying $2000 for a 50 sq. feet box makes your economy bigger?

To me, economy isn’t an abstract thing to be measured without taking people’s quality of life into perspective. That just feels too much like stats for the sake of stats.

The PPP based measurement is way more interesting.

What’s worse you’ve committed a double sin, you’ve used figures which were already normalized using the constant international dollar and applied exchange rates to them.

But obviously I can live without these things and for vital things, like laptops, washing machines, dish washers or tvs (not really vital), they cost peanuts second hand.

Differences in income have a surprisingly small effect on quality of life. If you make more money, you can still afford the same luxuries. Just more of them and more often. You are likely buying bigger and better versions of fundamentally the same things. You probably spend your money less efficiently, buying all kinds of minor conveniences.

And if everyone around you makes more money, your expectations go up, and your spending will be even less efficient.

The problem with taking general economic lessons from the US is that the US is in a unique, and uniquely advantageous economic position.

It's also terribly USAian of you.

I wonder how much of those are things like "credit protection fees", "check printing fees", CC anual fees (of multiple CCs) or just paying hundreds of dollars for a medical consultation even after copay, etc

> everything being smaller in Europe, people owning less

Your car does not need to be a d*ck measuring contest, and public transport usually works

For a net worth of €4m, you'll pay €60k in Aragón to €22k in Vizcaya to €0 in Madrid.

I overestimated the tax by a lot, I misread the chart and was adding the "Cuota" (sum of previous row taxes) from 1 row below what I should have.

They only pay 3,108.51 on the first 668,499.75. This puts the total tax at about half of my estimate, so only a ~0.35% drag on their 2M portfolio.

It's a very progressive tax, basically goes up 10X for really rich folks (>10M they take 3.5% of total wealth).

It is possible that some European countries have over corrected though.

What does taxing _income_ of upper-middle class high-earners (who are probably coming somewhere from Eastern Europe and are not related to Habsburgs or something) have to do we dealing with _generational_ wealth of old-money families? In fact, descendants of well-off parents seem to do just fine. If anything they basically becoming landed gentry considering how unattainable housing has become.

https://www.economist.com/graphic-detail/2018/02/14/american...

The difference between states is big but you go on to say that it's as big as the difference between two European countries. Your comparison only points out Europe is as least as diverse as the US and still has a significantly higher life expectancy.

Are you seriously to claim that the EU is a single country? Or that there are no differences between EU countries? That link actually has a table of all EU countries, and it ranges from 72 to 83. This is actually a LARGER difference than in the US: where it ranges from 74 to 82.

You need to read what's actually being said before climbing up the walls.

by what metric?

Personally I think average Americans have a hard time imaging a world where there is more to life than money.

Ultimately whenever I see these "murica" centric posts, I remember them flying in emergency medical supplies from China and everybody being upset about how the worlds greatest super power didn't have enough supplies for their own medical staff.

Stay humble.

My point is to suggest that maybe top line numbers don’t tell the whole story. Maybe in a society where wealth is hyper-concentrated, the heuristic coupling of GDP growth and social progress breaks down.

Flip the US and EU, it makes no difference to me. My point is that GDP is a poor metric for most things we should care about, and maybe we should get off the paperclip maximization train and onto the well-being maximization train.

I suspect what's driving down life expectancy is me OD'ing on fentanyl at 30 or getting killed in a shoot out at 20 or dying in a car crash at 10.

Short version of what I think is going on - young people dying lowers life expectancy a lot more then old people dying a bit earlier then they might have.

A white person living in well-of state has about the same life expectancy as those living in the highest rated European countries.

Look at real total compensation growth over that time.

The idea that the average worker is not better off now versus 1970 is not a reasonable take.

That's categorically not true. Adjusting for inflation, wages today are up 6.8% compared to 2008.

[1] https://fred.stlouisfed.org/series/LES1252881600Q

More jobs are only good if they actually provide a living wage.

Also, extremely uneven economic distributions tend to be bad for large segments of the population due to inherently limited resources like desirable beach front property as well as artificially limited resources like city apartments.

>Here’s another statistic on dynamic equality in America: 10% of Americans will spend at least one year in the top 1% of income earners, and more than half of all Americans will spend at least a year in the top 10% of income earners. Since what we’re trying to do is allow the market to reward those who contribute to society, greater turnover among the rich in the United States is a sign of fairness.

https://www.shortform.com/blog/types-of-inequality/

https://medium.com/incerto/inequality-and-skin-in-the-game-d...

If things were improving "exponentially" like you claim, our lifespan would be accelerating and these "miraculous" treatments would allow us to live 100s of years. What's actually happening is our lifespan is not increasing, and in some years has been decreasing.

>>maybe you're depressed

But if these "miraculous" "exponential" medical improvements were real, we would expect to see less and less people who were depressed every decade. Instead, depression rates have been increasing.

One might also suggest if the world were DRAMATICALLY better as you claim, depression rates would be going down, not going up.

You're off your tree.

Coal usage is at an all time high while the climate is collapsing. We're living on an exponential growing crisis is maybe what you should be saying.

By your metrics, it'd be hard to argue that things aren't getting worse in last decade. I'm not arguing things are worse now, just that you chose bad measures.

However, just because it's good, doesn't mean it couldn't be better. I think this all the time - why can't the rich be rich without inflicting cruelty and suffering on people? You can have your millions, just give us healthcare, housing, public transit, vacation time, and fair pay, and stop dumping chemicals in the water, torturing animals, warming the planet, addicting folks to opioids, and promoting guns and the use of personal vehicles.

We don't have to imagine or fantasize about improvements the US could make - we have an example right in front of us with many social democracies in Europe. When a car backfires, the French don't assume it's an active shooter. When a Dane gets into an accident, they don't take a taxi to hospital. When your CEO gets trolled on Twitter and decides to fire 70% of the staff, you don't have to worry about it because you have an employment contract, and he simply can't.

We have to do better.

Ain't disputing that, but that's an outlier because it's a government provided thing, at least where I live.

But look at the rest of those things from a POV of people from lower and middle classes:

> - Your access to cleaner air due to electric car adoption

Yeah someday, maybe; right now it only means my perfectly good car is no longer good, and I have to somehow find money to replace it - and since this tech is new, there aren't many cheap used replacements available.

> - Ditto for energy security and renewable sources of electricity

Energy security? That's not what TV says. Renewables? You mean like those PV scam companies popping up everywhere? Or government forcing me to replace my cheap heat source with an expensive one?

> - Your chance of dying in a car going down due to new safety features

Feels like a pretty remote risk at this point (if it weren't, people wouldn't be driving at all). But sure, nice that safety improves over time, even if I'm always 10-20 years behind on the features.

> - Your access to crazy advanced cancer treatments that are making progress at almost miraculous paces

US: what access? Can't exactly afford it.

EU: what access? The queues are so long I'll die before my appointment comes up.

> - Your much improved ability to work from home, cutting out ~2 hours of commuting each day

That's thanks to COVID dragging the market kicking and screaming into this new reality, and with the pandemic over, the businesses are trying to decide which jobs to force back into office, and which to offshore. Neither is really a win.

(Also, it was hardly an ability - everyone was forced into it. Commute doesn't look all that bad compared to two working parents and all the kids trying to simultaneously remote-work and remote-learn in an apartment not sized for this.)

> By every metric, the world is DRAMATICALLY better today for virtually everyone than it was in 1960

What about it no longer being possible for most couples to live on a single income?

> maybe you're depressed

Funny you should mention depression - yes, support for dealing with it is better than ever, but it's also not accessible to most.

The latter probably worked out better.

Doing fiscal austerity isn't bad if your monetary policy keeps AD stable. Doing the opposite and spending more is also not really bad as long as monetary policy is correct.

The US had bad monetary policy that was partly responsible for the recession of 2008/2009 but corrected it eventually. The Eurozone never corrected in and held to an extreme tight monetary policy for years and at the same time doing austerity.

And that simply can't work, if your AD is collapsing, trying to save enough to pay back huge nominal debt is simply impossible.

Yanis Varoufakis who was Finance Minister in Greek proposed debt payments indexed to NGDP, so that if AD was going down they would have to have less debt payment. But this was rejected by

Countries with their own currency, like Sweden, Switzerland and so on did better despite having many of the same pressures and not going on fiscal spending spree.

I think it does make some sense for the government to invest in infrastructure during a recession. But not because of the Keynesian thinking of pushing up AD, but rather because it just make sense invest in infrastructure and its slightly cheaper during a recession.

The universities and colleges around the world have not adopted to the new reality where knowledge up to Master Degree level is essentially freely available to everyone with an internet connection.

But colleges are still needed - if only for human reasons. And that's where I believe they should emphasize. A place where young people discover what they want to do and weigh their options. Instead of being assigned a major and mostly determined coursework.

1. Germany has no energy sources. USA had blown up the pipelines delivering cheap energy from Russia that German industry needs badly (so, German industry has been closing and has declining output since), also in just as brain-dead move Germany closed all its nuclear plants.

2. USA is deliberately suffocating German economy. First, dieselgate. Then, "fine" for Deutsche Bank for "provoking crisis of 2008". Then making Germany loose access to cheap energy and providing money to German industrial companies that want to move their plants from Germany (where they have no future due to lack of energy and other resources that were imported from Russia) to USA.

EE countries which adopted the Euro did quite good as well. For instance growth in Poland lagged significantly behind Estonia or Lithuania in the last 10 years or so.

With this I'm glad my country doesn't qualify - I'll take that any day vs having monetary policy tied to that of a very different economy.

Dirty little secret in the US is that for very many people, there's no opportunity for growth whatsoever either. It's a relatively small section of society that even gets access to that opportunity. A lot of people in the US would trade their 'exciting' life of working 80+ hours a day to barely be able to pay the bills for the boring job your sister left.

> But hey she could take double the vacation that an average US employee gets!

Uh, if she could take vacation _at all_ she was already head and shoulders above a huge chunk of the workforce in the US.

But it's hard to get a 1:1 comparison because the data in Europe on things like homelessness is shockingly poor. Most of the major European cities have strong dispersion/anti-camping laws. Because homelessness is kept more out of sight in Europe, it doesn't draw as much attention.

Sadly, there are a large number of people who cannot do that whether from drugs, trauma, natural inability, etc.

I think cultural expectations are more defining, for example Turks are frustrated with the healthcare in Europe because they expect to see a specialist ASAP even for the smallest thing and they want antibiotics for it. In Germany you won’t get all the antibiotics you want unless you actually need it and you won’t be seen by a professor just because you feel like. Germany will try to make you live healthier life through preventative medicine, Turkey will try to give you a 5 minutes access to a doctor and infrastructure quickly.

I’m hearing about Americans complaining on similar stuff. IIRC Americans feel neglected during pregnancy in Germany despite that the US infant mortality rate is almost twice the German one.

GDP is most often used by the government of a single country to measure its economic health.

https://en.wikipedia.org/wiki/Gross_domestic_product

I love when someone correct me because I don't like carrying incorrect knowledge with me

Your hostile and condescending tone however wasn't needed

USA 41.5

EU 29.6

Debt is often used as a justification for spending cuts, often targeting the middle and lower classes

It's a weakth shift. The EU could double it's debt and give the money to the companies and would be on the same level as the US, GDP and debt wise.

These outdoor museums are actually preserved villages where people live in these old conditions because they feel good that way. Somehow like today's Europe. Progress is limited and regulated or stopped.

Unfortunately the people who downvoted me must be thinking differently. Would have loved so much to hear their reasoning and POV on the matter, especially if they disagree with my hypothesis, I’m always willing to learn.