How Great is America

How Great is America? 

The 2016 US Presidential race has raised questions about how great America is. One Presidential candidate has said, “This place is a hell hole and getting worse.”  Polls show that 70% of Americans believe the US is on the wrong track.  So, what do the numbers show?

Economy:  The US has the largest economy in the world with $18 trillion in nominal Gross Domestic Product (GDP).  The EU is second at $16 trillion.  China is third at $11 trillion.  Although economic growth has been slow, the US has the fastest growth rate among the developed countries.  (See the CIA’s list of 34 developed countries in a note at end.)

National Wealth:  The US is the largest country in national wealth at $86 trillion.  China is second at $23 trillion.  Japan is third at $20 trillion.

Per Capita Income:  Per capita income in the US was $56,516 in 2015, the highest of any large country and eight times that of China.  Income growth exceeded 5%, the largest gain since records began in 1967.  Income and job growth have risen every year since 2009.  Job growth is the longest streak on record.

Income Inequality:  Pew Research ranks the US 21^st in income equality among 31 developed economies.  Switzerland and the Scandinavian countries are among the best in income equality.  Those countries also ranked the highest in happiness, according to US News & World Report.  The US ranked 15^th in happiness.  The countries with the best income equality and happiness rankings pay higher taxes and have more government involvement in their economies.   American income inequality likely contributes to the high wrong-track numbers.

Income Inequality:  Pew Research ranks the US 21^st in income equality among 31 developed economies.  Switzerland and the Scandinavian countries are among the best in income equality.  Those countries also ranked the highest in happiness, according to US News & World Report.  The US ranked 15^th in happiness.  The countries with the best income equality and happiness rankings pay higher taxes and have more government involvement in their economies.   American income inequality likely contributes to the high wrong-track numbers.

Defense:  David Petraeus said, in Foreign Affairs September/October 2016 issue, “The United States has the best military in the world today.  US forces have few, if any, weaknesses – from naval warfare to precision-strike capabilities, to airpower, to intelligence and reconnaissance, to special operations – they play in a totally different league from the militaries of other countries.”  The US also has the best technology, weapons and military personnel.  And, the US spends three times as much as China on defense and more than the next eight nations combined.  The US spends a larger % of GDP on defense than any developed country, except for Israel.

Immigration System:  Illegal immigration peaked in 2006 and has been declining since.  Net immigration from Mexica (legal & illegal) has been running at a negative 21,000 per year during the last five years, according to Pew Research.  For the last two years, the two countries that have provided the most immigrants to the US have been China and India.  The crime rate among immigrants is one-third the crime rate among the general American population, according to the Wall Street Journal.  Drugs are increasing entering the country via drones.  .   .   The US immigration system is more restrictive for skilled workers than most developed countries, which has caused companies to locate research facilities outside the US.

Unemployment rate:  US unemployment rate peaked in 2010 at 10% and has dropped in half to 4.9%.  However, the percent of adults participating in the labor force has declined.  The two major causes of this are demographics (baby boomers retiring) and increasing college attendance.  The US is among nations with lowest unemployment rate in the developed world.

Globalization, Technology & Unemployment:  Some industries, including textiles and furniture manufacturing, have been severely hurt by outsourcing production to countries with lower labor costs.   Advancements in technology have also contributed to the decline in manufacturing employment.  As an example, employment at General Motors’ worldwide has gone from 877, 000 thirty years ago to 215,000 at the end of 2015.  Manufacturing employment in the United States has gone from a peak of nearly 20 million in 1979 to about 12 million today.   Since 1979, industrial production in the US has doubled, peaking in 2015, but 37% fewer people are employed in manufacturing.  Unfortunately, the US is among the worst nations in retraining the unemployed or under employed.  Germany is among the best.

Crime Rate:  The murder rate in the US peaked in 1990 to 1994, when murders averaged 24,108 per year.  Murders have declined to an average rate of 14,577 per year since 2010.  Nevertheless, the US has the highest death rate from guns among the developed countries.

Education:  The US has the best universities of any country in the world.  However, in secondary education, the US ranks 14^th.  The top five nations in secondary education are South Korea, Japan, Singapore, Hong Kong and Finland.

Infrastructure:  The US ranks 11^th in quality of infrastructure, which includes roads, bridges, water systems and power supply systems.  The top two are Hong Kong and Singapore.  Most Western European countries rank ahead of the US.

Corporate Tax Policy:  The US has the highest corporate tax rate among developed nations before deductions, but the US is average after deductions.  Tax loopholes and subsidies cost the Treasury more than $1 trillion per year, which is about the same as Social Security and Medicare combined.

Individual taxation:  Of the 34 advanced countries, the US ranks 31^st in amount of taxes paid per capita by individuals and the percent of income paid in taxes.

Deficit:  The US deficit as a percent of GDP has declined from 10% in 2009 to 2% today.

Government regulations:  US Government regulations appear to be excessive, but they are less than other developed nations.  The World Bank consistently ranks the United States as the easiest place to do business among large developed countries.

Campaign Finance:  All other developed democracies spend less on elections than the US.  Many provide public funding and limit the campaign period.  Some forbid TV advertising.  Only in the US can people and organizations buy favorable legislation through campaign contributions.  As an example, managers of hedge funds and private equity funds saved $14 billion in taxes over ten years by contributing an estimated $60 million to congressional campaigns to promote “carried interest” legislation.  Even though carried interest is considered the most egregious tax loophole, it passed.  Tax loopholes and subsidies cost the Treasury over $1 trillion per year, about the same as Social Security and Medicare combined.

Technology:  As the world evolves from the industrial revolution to the technology revolution, the US is home to all of the leading technology companies:  Apple, Alphabet (Google), Microsoft, Facebook and Amazon.   The US leads in mobile telephony, social networks, Nano technology, bio technology and most other fields of technology.  No other country has duplicated Silicon Valley.  While the US is the clear technology leader by most measures, the US Government has reduced its funding for basic scientific research.

Reserve Currency:  The US dollar is the world’s reserve currency.  It is the most trusted currency.  Most international transactions are conducted in US dollars.

Stock Market:  During the George W Bush administration, the Dow Jones Industrial Average declined 25%.  During the Obama administration, it has increased 233%.  Nevertheless, a recent poll showed that a majority of self-identified Republicans believe that stocks have gone down during the Obama administration.  This may feed into the right-track wrong-track polls.

Right-track wrong-track polls:  In the 44 years since right-track wrong-track polls began, these polls have rarely shown that the US is on the right track.  Right track occurred during two of Regan’s eight years as President and three years during the Clinton and Bush Presidencies.  The last time was at the beginning of 2004 when 55% of Americans thought the country was on the right track.  What followed was the worst recession since the Great Depression.  Consumer confidence, on the other hand, was in the 40s in 2008 and 2009 and has been over 90 for the past two years.

Global Image:  Pew Research has polled more than 30 other countries on the favorability rating of the US.  In 2015, American favorability ratings were higher than a decade ago in all countries with three exceptions:  Russia, Jordan and Lebanon.

Olympics:  Finally, in the Rio Olympics, the US won 121 medals, compared to 70 for China, 67 for Great Britain and 56 for Russia.

Although far from perfect, the statistical evidence clearly shows the United States is the greatest country on earth.

 

 

Note:  The CIA lists 34 countries as “developed.”  They include the US and Canada, Western European countries, Israel, Japan, Australia and New Zealand.