The United States vs. Europe

By Dan Mitchell.

"To show that living standards are much higher in the United States than they are in Europe, I periodically share OECD data on average individual consumption (2012, 2014, 2017, 2019, and 2022).

All of which implies that European economies should be growing faster than the U.S. economy.

But that’s not the case. In fact, the opposite is true. There’s anti-convergence.

Today, let’s look at another example, courtesy of a tweet by Jeff Weniger.

For what it’s worth, I think the chart overstates the American advantage (unless I’m misreading, I don’t think the numbers are adjusted for purchasing power parity).

That being said, the trend lines are very consistent with other data showing faster growth in the United States.

To wrap up, let’s look at a specific example of how Americans enjoy higher levels of consumption.

In this case, for housing. Here’s a map of square feet per dwelling that was shared by Prof. Garett Jones of George Mason University.

A dramatic difference, to put it mildly.

When I share this type of data with some of my left-leaning friends, they sometimes tell me that Europeans simply choose to work less and consume less because they value a better quality of life.

The only problem with that claim is that scholarly research shows that Europeans work less because of high marginal tax rates."