By David Harsanyi
Monday, September 27, 2021
In a now-deleted tweet, progressive representative
Pramila Jayapal made the wild claim that the “U.S. has nearly ONE-THIRD of the
world’s billionaires. Meanwhile, our poverty rate is the 4th highest in the
world. Tax the rich.” Big if true! But the fact that any elected official
could, even for a fleeting moment, believe that the United States had anywhere
near the highest poverty rate in the world tells us a lot about the progressive
mindset and policy goals.
Democrats tend to perfunctorily portray the United States
as a poverty-stricken plutocracy where “[t]rillionaires and billionaires are
doing very, very well,” as Joe Biden argued the other day when peddling
his massive state expansion, but “the middle class keeps getting hurt.”
This idea is driven by a zero-sum obsession with “inequality,” and not the
reality of a nation where the largest economic movement over the past decade has
been from the middle class to the upper middle class.
Progressives tend to contrast the fortunes of low-income
Americans with their high-income neighbors. And maybe this works as a
domestic-populist political attack. Any global comparisons, however, will only
illustrate the superiority of American economic life.
When Pew analyzed the 111 nations that accounted for 88 percent
of the global population, they found that the middle-income range translates to
an annual income of $14,600 to $29,200 for a family of four. The U.S. average
household income is over three times that amount. Nearly nine in ten Americans
find themselves substantially above the global middle-income standard, which is
to say that by world benchmarks there are very few impoverished people in the
United States. Once all income, charity, welfare, and social benefits are
calculated, the poorest 20 percent of Americans likely consume about as many goods and services as any of the
relatively wealthy nations of Italy, Spain, and Britain.
Put it this way: If the United States invaded Britain
tomorrow and made it the 51st state, it would probably be the second poorest behind Alabama
and ahead of only Mississippi. If Germany, Sweden, or Denmark joined the
union, they would rank in the bottom third of American states in per capita
GDP, median annual income, and a host of other quantifiable measure of wealth.
Italy, Spain, and Portugal, among others, would be at the bottom. As a highly important forthcoming book details, there is no
reason to adopt a European-style welfare-state system.
The unemployment rate in the United States is typically one of the (organically) lowest in the
world. The United States has the highest per capita wealth in the world and the sixth-highest median income in the world — a somewhat
misleading statistic, as it measures the earning power of an individual but
fails to take into account the accumulated wealth of Americans. Overall, we
have more personal savings than any nation, as well.
It should be remembered that the United States creates
wealth for 350 million people — in comparison with other top performers, such
as the European city-states Monaco and Luxembourg, and the small petrostate of
Norway — and is a place that welcomes a constant stream of poor immigrants.
And, as numerous economists have pointed out, the world benefits
from the spillover of American wealth through trade. Although the United States
constitutes less than 5 percent of the world’s population, we generate and earn more than 20 percent of its income.
We have the largest economy in the world, and its share
has remained basically unchanged since 1980, when it accounted for 25.2 percent
of the world GDP. Today, despite the rise of China and India and other
developing economies, its share is 24 percent. During that same time, the
European Union’s share of the world economy fell from 34.6 percent to 22 percent.
While national GDP growth matters, it doesn’t tell us the
full story, either. Simply because developing economies such as China and India
are experiencing a larger percentage of growth doesn’t mean citizens in those
nations are better off than we are (incredibly, this has to be said). There is,
after all, only so much room for traditional powerhouses to expand. A better
way to evaluate the prosperity of individuals is the change in the value
of real GDP per capita. From the pre-coronavirus years of 2016 to 2019,
Americans saw $3,413 in real GDP growth per capita, while the next-best Western
nation, Finland, saw $2,309 growth, and most experienced under $1,500 growth.
We’re also doing better than most in the post-COVID era.
Now, by American standards, there are
plenty of poor people among us. We shouldn’t pretend otherwise or demean their
struggles. There is, however, little evidence that we lag behind any major
nation. Nor is there any evidence that our economic system benefits fewer
people than any other. Yet, a growing faction of voters are convinced that
they’re living in one of the most iniquitous countries in the world. Joe Biden
says he ran for the presidency to “change the dynamic of how the economy
grows.” But progressive redistributionist policies, as we’ve seen elsewhere around
the world, would make us less dynamic, less wealthy, and less innovative.
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