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U.S. economy would pass a 'global test' with flying colors


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By John Metzler
SPECIAL TO WORLD TRIBUNE.COM

Friday, October 8, 2004

UNITED NATIONS Ñ Whoever wins the White House in the upcoming Presidential Election will inherit a far stronger economy than existed in 2001. The reasons are manifold, but include the U.S. being a leader in the ongoing world economic recovery which is now expected to see a five percent global growth rate, the fastest for thirty years.

Having inherited a recession combined with the unexpected and shattering shock of the September 11th terrorist attacks on America, the Bush Administration faced an economic double whammy which jolted markets, caused a nose dive in economic confidence, and most tragically caused the loss of more than a million jobs. Even this year, severe winter storms and deadly summer hurricanes wreaked havoc in large parts of the country, and among other things causing a slack in retail sales.

Despite what many people view as an U.S. economic malaise, the facts Ñ as presented in the prestigious Economist of London Ñ prove quite another story.

Given that Sen. John Kerry speaks of AmericaÕs national security policy having to pass Òsome sort of global testÓ letÕs apply those parameters to the U.S. economy. Indeed most of the 191 UN member states wish they had AmericaÕs problems.

First off, U.S. Gross Domestic Product (GDP) is expected to grow 4.3 percent for 2004 Ñ and slightly lower 3.4 percent for next year. The European Union (EU) is slated to reach 1.8 percent growth this year and 2 percent next year. ThatÕs about half AmericaÕs growth.

If we take the individual economic powerhouse members of the EU such as France we see a projected 2.4 percent growth this year and 2.2 next year; Germany 1.5 percent this year and 1.7 next year, Italy 1.2 this year and 1.7 next year, and the United Kingdom 3.4 this year and 2.7 next year.

By the way if should you compare growth rates for 2003, one finds the USA with 2.9 percent growth, the entire EU with 0.5 percent, France with 0.2 percent, Italy 0.4 percent and Germany with nil growth!

One of the bright stars has been Japan whose once supercharged development was saddled by a recession for a decade; Japan grew 2.6 percent in 2003 but was projected to reach only 2 percent this year. Japan has hit a home run and now is expected now to reach 4.5 percent growth for 2004. The stimulus of JapanÕs economy Ñ as with AmericaÕs, serves as a global energizer.

By now many readers are saying fine, but what about unemployment Ñ President Bush losing all those jobs? While the jobless rate at 5.4 percent is still too high itÕs nearly the same statistical number that wowed and awed so many people during the Clinton years.

Once again the global test shows that European UnionÕs combined unemployment is 9 percent. In France it stands at 9.9 percent; in Germany 10.6 percent (that includes the 18 percent unemployment in Eastern provinces still struggling with the lingering legacy of socialism); United Kingdom 4.7 percent, and Belgium 13.2 percent.

Now letÕs turn to our Asian friends where unemployment during the past generation was practically not even a word in their vocabulary. Japan still has 4.9 percent jobless, Hong Kong 6.8 percent, Taiwan 4.6 percent, and Singapore 4.5 percent.

For the Far East these numbers are startling and relate both to the lingering Asian economic crisis and the aftershocks of September 11th on the world economy. In wealthy Singapore, the local press blames unemployment on job outsourcing to foreign countries.

Fine, many say sure, statistics can prove anything but what about the average Americans? The Swedish research institute Timbro asks the rhetorical question ÒIf the European Union were a part of the United States, would it belong to the richest group or the poorest group of states?Õ Timbro argues that a combination of high taxes, and overbearing regulation is to blame for the lagging prosperity of Europe ... the gap between Europeans and Americans grows wider still when one considers individual consumption and standards of living rather than just economic output.

As also quoted in the American Enterprise magazine, Òto finance their large welfare states Europeans pay much higher taxes than AmericansÓ (except of course places like New York City, Massachusetts and Hawaii).

But hereÕs what I find interesting. If you take the relative wealth of the USAÕs average of 1.4, the European Union charts lower at 1.0 . While New York ranks above the average with 1.7, Florida rates slightly below the U.S. average at 1.2 on par with Germany at 1.2, Ireland at 1.2, Britain at 1.1. Both France and Italy hold to the EU average at 1.

America scores well on the global economic test. Sadly many professional yammerers who gleefully revel in economic gloom, will beg to disagree.

John J. Metzler is a U.N. correspondent covering diplomatic and defense issues. He writes weekly for World Tribune.com.




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