It’s no secret that America has seen better days. President Joe Biden is taking on the daunting task of pumping $2 trillion into fixing the economy and building it back better. But let’s be real, Americans are more worried than a turkey on Thanksgiving. According to a poll, almost four-fifths of Americans believe their kiddos are destined for a worse-off life than they are. The last time people felt so gloomy about the economy was during the global financial crisis. Yikes.
But hold on to your toques, folks. Despite the doom and gloom, America has been silently crushing it. We’re still the richest, most productive, and most innovative big economy in the world. Eat your heart out, rest of the world!
Let’s check out the numbers, shall we? Sorry, math haters, but stay with us. In 1990, America accounted for 25 percent of the world’s output at market exchange rates. Fast forward 30 years, and that number is still around the same, despite China’s economic rise. America’s even more dominant in the rich world, with the US currently owning a whopping 58% of the G7’s GDP, compared to just 40% in 1990. If we look at purchasing power, only the über-rich petrostates and financial hubs earn more per head. Our average income even tops $50,000 in Mississippi, America’s poorest state, which is more than in France. Bazinga!
But it’s not just the cash that makes America great. We’ve also got a lot of brains. In 2021, America had nearly a third more workers than it had in 1990, with more of them having grad and postgrad degrees. And they’re not just loafing around on the job, either. Americans work more hours on average than their European or Japanese counterparts and are significantly more productive, too. Hat trick!
Patents, baby! In a global game of who’s who, American firms own over a fifth of patents registered worldwide, beating China and Germany put together. The US also nabs all the top spots for R&D, with American companies pumping $200 billion into it last year alone. From iPhones to artificial-intelligence chatbots, we’ve got it all. And let’s not forget how those investors are laughing all the way to the bank—$100 invested in the S&P 500 in 1990 would now be over $2,000. That’s four times more than if they’d ditched us for the rest of the rich world. Sorry, not sorry, Europe and Japan.
Okay, okay, we know what you’re thinking. “Sure, America’s killing it, but at what cost?” Well, other countries might have more generous social benefits, but that doesn’t make us stingy. We’ve been getting more European with our benefits as we’ve grown bigger, and they’re growing even faster. Tax credits are more generous, health insurance is wider, and all of it adds up. In 1979, poor Americans only got around one-third of what their richer counterparts did, but by 2019, it was up to two-thirds. And our poorest fifth got a real-term income boost of 74% since 1990, beating poorer Brits. Take that, England!
So, what can we learn from America’s enduring success story? The big takeaway is that size matters—bigger consumer market, deeper capital pockets, more room to splurge on R&D, you name it. Only China and maybe India can compete with us on such a scale. High-fiving ourselves aside, copying us is easier said than done for our European friends. They’ve tried to create a single market like ours, but it’s messier than a pre-schooler’s craft table. Plus, our quality workforce is boss. We’ve got a younger and more fertile population than other rich countries, so we’re not aging as quickly. Our high percentage of immigrants—17% of our workforce in 2021—doesn’t hurt, either. Take THAT, Japan.
Flexibility is key, too—something we Americans know all too well. Starting a business is practically our national sport, while restructuring through bankruptcy is more common than singing “Take Me Out to the Ballgame” during the seventh inning stretch. Our labor market is adaptable, so we can easily mold to changes in demand. Meanwhile, in continental Europe, they’re still busy negotiating tech layoffs from YEARS ago. Ain’t nobody got time for that.
Despite America’s success, we always have room for improvement. The middle class is slacking behind the poorest and richest in terms of post-tax income, and we have a group of people struggling to make ends meet. We’ve also got a rising number of prime-age American men with no work. Plus, our life expectancy is lagging behind the rest of the rich world, with overdoses and gun violence to blame. Our politicians’ toxic politics don’t help, either. Ugh.
Let’s hope we don’t mess things up in the next 30 years, huh? While subsidies and investment may seem like short-term solutions for our economic struggles, they could actually end up being like eyelash extensions—more trouble than they’re worth. They could dull market incentives to innovate and encourage wasteful lobbying in the long run. Plus, we’re staring down fresh challenges like climate change and the rise of China. Remember, America’s prosperity comes from our openness, so let’s keep that going.