FRIDAY GRAPH: US vs EU (and NZ)

Today’s Friday Graph is courtesy of prolific chart-maker Mark Perry:

In a New York Times editorial last year titled ‘Learning from Europe’ Paul Krugman wrote:

The story you hear all the time about Europe– of a stagnant economy in which high taxes and generous social benefits have undermined incentives, stalling growth and innovation – bears little resemblance to the surprisingly positive facts. The real lesson from Europe is actually the opposite of what conservatives claim: Europe is an economic success, and that success shows that social democracy works. The European economy works; it grows; it’s as dynamic, all in all, as our own.

The BEA recently released data for the amount of GDP produced by US states in 2010, which allows for an updated comparison with European countries (and Japan and Canada).  See the table below (international countries are adjusted for PPP).  Key findings:

1. The European Union as a group ($32,700 GDP per capita in 2010) ranks below America’s poorest state, Mississippi ($32,764).

2. Even relatively wealthy (by European standards) Switzerland would rank #32 as a US state, behind Georgia.  The countries of Belgium and Germany would rank even lower at #46 and #47, and the United Kingdom, Finland, and France would be close to the bottom of American states, below #48 South Carolina.

3.Spain, Italy, Greece and Portugal all rank below America’s poorest state (Mississippi) for GDP per capita.

On a similar PPP basis, New Zealand comes in at US$27,700, between Greece and Portugal.

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8 thoughts on “FRIDAY GRAPH: US vs EU (and NZ)

  1. Israel is fighting a war, that explains it’s low placing.

    Now let’s see: Spain, Italy, Portugal, Greece, Ireland and NZ

    just another coincidence?

    As machine-gun armed police are hitting the streets in Europe to keep some kind of order as the entire European economy collapses

  2. Canadians, worry (correctly) about our relatively low rate of productivity. Especially relative to our neighbours South of the border. Somewhere between Michigan and New Mexico puts this in perspective, and sounds about right. Oh happy Canada Day (1 July)! As for Europe – no surpises there – maybe Paul doesn’t follow the news – just tries to write it? Maybe you shouldn’t believe everything you read in the newspaper! 🙂

  3. What is Australia? I get sick of the comparisons, but it is probably where my son will end up living, so that he can earn enough money to be able to live a good life in NZ. I think I will go there soon to so that I can avoid the collapse of NZ.

  4. Yep – frankly any kiwi with an ounce of freedom or capitalism in their bones has already caught Australia by catching a plane

    by definition, those who are left are either bludgers or happy to pay for bludgers til the country runs out of potential creditors…

  5. Meanwhile: even the Guardian admits europe is bankrupt and its Greece bailout has failed

    Who the fuck is going to bail NZ out – I wonder?

    or can we keep racking up debt at about 1 BILLION NZ DOLLARS per week and SPENDING IT ALL ON WELFARE?

  6. Sinner, FWIW anyone who catches Australia (courtesy of Air New Zealand) seeking to avoid high-tax Keynesian economic socialism is likely to have read extensively about Australia in the New Zealand Herald. The top rate here is 47% (admittedly it only kicks in at $170K, but if you’re coming you might as well aim high, right?)

    New Zealand has significant structural issues, notably (as you say) borrowing $1 billion per week and spending it all on welfare, and (as you’ve rightly pointed out many times in other places) when the $kiwi returns to its long-term average against the $US, that $1 billion is going to cost a lot more to repay than it does now. One can only hope sufficient kiwis wake up to themselves and come November 26 give Dr. Brash some real power to rein in a National party currently spending like a drunken sailor on shore leave.

  7. would be interested in seeing the same table using median income – would expect NZ to still be somewhere at the bottom (or worse given the disparity across income groups) but you may see Europe move a lot higher compared to US.

  8. Paul Krugman is acting like a great intellectual as if he’s in par with the likes of Feynman, Einstein, etc,… He thinks that his every misguided words must be taken seriously. The sooner this socialist cartoonist zip his lips and not utter any ridiculous opinions in the media about world economies, the better.

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