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 U.S. states in 2010, which allows for a updated comparison of output per capita in U.S. states to European countries (and Japan and Canada), see 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 U.S. state, behind Georgia. The countries of Belgium and Germany would rank even lower at #46 and #47, and the U.K., 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.
Paul Krugman's assessment of Europe's economic success bears little resemblance to the surprisingly negative facts, which are actually the opposite of what Krugman claims. With a few exceptions, the amount of economic output produced per person would rank most European countries among America's poorest states. And even America's poorest states like Mississippi and West Virginia would rank above average among the countries of Europe. When it comes to economic success, the data suggest that Europe has a lot more to learn from the U.S. than vice-versa.
|Rank||GDP per Capita, 2010|
|District of Columbia||$168,327|