President Obama repeated a claim last night several times in his State of the Union address about the state of America’s economy:
“… the United States of America, right now, has the strongest, most durable economy in the world.”
“Anyone claiming that America’s economy is in decline is peddling fiction.”
“… all the talk of America’s economic decline is political hot air.”
Just to set the record straight, here are some facts about America’s economy:
- In the past ten years, America’s “purchasing power parity” (or “PPP”) – a rough measure of the wealth of the citizens of each nation – has grown by 30%. Sounds good until you realize that most of the world has actually fared much better. The U.S. actually ranks 106th out of 165 nations studied, and is tied with Eritrea in terms of its growth in PPP over the past ten years.
- To be fair, many 3rd world nations are starting from such a low PPP that it’s easy for them to experience rapid growth. So let’s look at it in terms of actual PPP. In 2014, the most recent year for which the data is available, the U.S. ranks 19th in terms of PPP.
- Of the 23 nations with PPP of at least $40,000, the U.S. ranks 20th in terms of growth in PPP over the last 10 years.
- In terms of its growth in GDP, the U.S. ranked 131st in 2014.
- The U.S. ranks 98th in terms of gross national savings.
- 67 nations had lower unemployment rates in 2014
- The U.S. ranks 43rd in the world in terms of its “Gini index,” a measure of income disparity.
- As a percentage of GDP, the U.S. ranks 32nd in terms of public debt.
- In terms of current account balance – essentially, the trade deficit – the U.S. ranks 195th.
These are the facts, as published in the CIA World Fact Book. (10-year data is from Index Mundi.) Interpreting the above facts to mean that we have the “strongest, most durable economy in the world” is analogous to concluding that the last creature left barely alive among a group of creatures that has been infested with some parasite (which is an apt analogy for the effect of free trade on America’s economy) was the strongest and most durable. It’ll soon be no less dead than the others.