Thursday, March 02, 2006

Europe's Economic Flu Harms U.S. Also

Bird flu is an impending threat to Europe, but it already has made itself sick economically. The Flu is dependence on government. Its effects reported by Discovery Institute's Richard Rahn
Europe's share of world gross economic product (GDP) has fallen from roughly a third, two generations ago, to only one-fifth today. The U.S. economy has grown about twice as fast as major European economies for the last two decades, resulting in the average American living about 40 percent better than his European counterpart. In the last quarter-century, Europe has created only 4 million new jobs (almost all in government). The U.S., despite a smaller population, has created 57 million new, overwhelmingly private sector, jobs. The portion of the U.S. population working is about 20 percent higher than in Germany, France and Italy. The U.S. unemployment rate is about half theirs (5 versus 10 percent). U.S. total government spending is about one-third our GDP; in Germany, France, and Italy the average is about half their GDP. Homeownership rates are far lower in Europe than in the U.S. -- where more than two-thirds of the people own their homes, which on average have about twice the square footage of the average European home.
Even more disturbing
... is the decline of optimism in Europe. A recent Harris Interactive poll found 57 percent of the people in the U.S. were very satisfied with their lives, compared with an average of only 16 percent in Germany, France and Italy.
Europe's various forms of market socialism have failed. Government squelches the efforts of individuals so there is less reward for working hard, investing and taking risks. So people make less effort. Even though we can be satisfied that our economic system has proven to be the best, we cannot rejoice at Europe's misery; it is not in our interest or the world's. Can the U.S. do anything to help? Rahn has two ideas:
... supporting the pro-growth policies of some of the smaller and newer free market countries. Many in the European ruling elite put down pro-growth policies by disdainfully referring to them as the "Anglo-Saxon model." Yet, perhaps, the most influential architect of the high-growth economic policies followed by many countries was the great 20th century Austrian economist F.A. Hayek. The U.S. government ought to wage an aggressive information campaign in Europe to offset many factual misrepresentations about the U.S. in the European press -- particularly in health care, levels of poverty, schooling, crime, justice, etc. By almost any measure, though far from perfect, the U.S. comes out better than much of Europe. Such a campaign will not cause Europeans to love Americans, but it might help force them to view their own failed policies more critically, the first step in bringing about change.

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