America is Very Rich. What Do We Spend Our Money On?
I don’t know if you realize just how much richer Americans are than other rich people around the world.
We talk a lot about the ways in which the American economy is broken — and it is broken in a bunch of ways. People on both sides of the political spectrum seem to fervently believe that something is critically wrong with our economy.
But by many measures, America’s economy has gained ground on most of the rest of the “rich” world, despite the way things may feel. A recent set of articles in the Economist laid out the math, which I found pretty surprising:
- The U.S. share of global GDP hasn’t declined since the 1990s despite the fact that many developing countries have gotten much richer — we still make about a quarter of the money on the planet despite being only 4% of the people.
- America’s GDP accounts for 58% of the total GDP of the G7 (the US, UK, Germany, Canada, France, Italy, and Japan), up from 40% in 1990.
- People in Mississippi, our least wealthy state, make more money than people in France.
- The gap in per-capita income between America and other rich countries has grown. In 1990, the average American made 24% more than a European. That figure is now 30%. In 1990, the average American made 17% more than a Japanese person. The gap is now 54%!
- Since 1990, almost every country in the world has lost ground on productivity — measured in GDP per hour worked — relative to the U.S.
So if Americans are, on average at least, much more wealthy than other rich people around the world, and if we’re increasing that gap, it’s worth asking — what are we doing with all this money?
What do we buy?
First, Americans like to spend our money on big stuff. It’s a cliche, but it’s a true one. Everything’s bigger in America.
Our houses are among the biggest in the world. The median American house is somewhere around 1,600 square feet, while the average homes in much of Europe are around 1,000 square feet. We’re not the only country with dwellings this big — Canada, Australia, and…