> But debts in the Alpine country are far higher than in the US...
Debts make this comparison difficult to make meaningful.
A few cases:
- Minimum wage earner barely scrapes by but does not seek any credit.
- Someone in a high cost of living area takes out a mortgage.
- A young neurosurgeon with fresh educational debt takes on a very high paying job.
- A billionaire borrows to finance a major real estate project
The net worth of these cases goes from highest to lowest. The "means" run in the opposite direction.
Sometimes indebtedness is poverty. Sometimes it's consumption smoothing. Sometimes it's a reasonable investment in a home or earning potential. Sometimes it's a dangerous source of leverage on a foolish bet.
I don't know how we disentangle all those when trying to measure or compare human welfare.
> the strength of the US dollar [also contributed]
If high Swiss property values and a strong US dollar conspire to to flip the #1 and #2 countries on this specific metric, I'm worried we're drifting into Spaceballs territory. What's all this mean? Possibly... absolutely nothing.
An important detail here is that in Switzerland it's somewhat normal to simply never pay back your mortgage, so many people will keep around a bunch of debt because it doesn't make financial sense to eliminate it.
When you get a mortgage it's usually broken into two amounts: an amount that you have to pay back (~30% if I remember right) and an amount that you don't (the rest). You can simply pay back the first amount quickly then pay interest on the second amount indefinitely. Interest rates here are extremely low (even a 15-year fixed-rate mortgage can be had for <1%) so you can keep the low interest loan and put the money elsewhere (e.g. stocks if you like to live on the edge).
“If you are a homeowner in Switzerland, you have to pay income tax on what is known as its ‘rental value’. The rental value theoretically represents what you as owner would receive if you rented the property to someone else, i.e. what that tenant would pay you in rent. At the same time, you can deduct mortgage interest payments and other costs for the upkeep of the property from your taxable income.”
https://www.ch.ch/en/rental-value/
Think of it as a tax just like on land, but for buildings.
The reasoning is that housing represents an asset that should not be bought just for speculation, i.e. buy it and let it sit empty until the price is high enough for the investor to make a good profit. Of course they're free to do just that, but all housing which people can live in, are taxed as if you had that income.
It’s the same in the Netherlands.
Instead of counting how much you earn from your capital, the tax administration estimates that you earn about 5% and taxes you on that (about 30% iirc).
But hey, if you make above their estimation, you don’t pay extra. But if you don’t invest, you still pay...
I really like how simple it makes the tax calculation (at least when you know how to value your assets).
It has changed in NL. It used to be 1.2% (it used to be 30% of 4%, I believe, but it was a bit before my time) on the value of all your assets (so what you said), but now they have a progressive system because the assumption that you make 4% on your investments has changed, the 30% stayed the same. Their assumption changed to: if you have less money you have relatively more money on the bank.
The actual calculation is a mix from all the brackets. E.g. if you have 1 million euro, then 71.650 is taxed at 0.58%, the bulk at 1.33% and a bit at 1.68%.
The progression goes as follows (I'm too into this apparently, forgive me):
It's simply a fairer way of taxation. Suppose that you own a house that you rent out and live in another house for rent. Then you obviously have to pay taxes on rental income. If you live in a house that you own, you don't have to pay taxes in most countries, although your financial situation is basically the same.
It makes sense as a way of taxing a secondary residence, but for a primary residence it makes no sense. What if you are old, or disabled, or unemployed? Are you forced to sell your house to pay this tax?
You could also rent it to someone other than yourself, pay your taxes on that income and use the profit to pay for a cheaper accomodation.
That does mean you can't use your own home as a safety for when you're old and poor, but that doesn't necessarily make the tax bad. It just means you have to change strategies and invest your money productively. In practice I'd expect the number of people who suddenly find themselves unable to afford even just the tax on what they'd have to pay to rent their own property to be quite small.
When you take out a loan, it doesn't decrease your net worth, right? If I'm worth $X, then I take out a $1MM loan, at that moment I'm still worth approximately $X (because the $1MM the bank gave me and $1MM I owe the bank cancel each other out).
I appreciate how your ranked Neurosurgeon at the bottom -- because under the typical system, future earnings are not NPV'd, so in the case of Neurosurgeon, you only see the liability but don't account for the extraordinary earnings potential.
I think a neurosurgeon is uniquely qualified to understand the dangers of putting all your baskets in one egg. But more seriously, I think its pretty wrong for a tax system to tax on future perceived value whenever there is an option to tax based on consumption and use (i.e. living in the home and working with the educated brain.)
> When you take out a loan, it doesn't decrease your net worth, right?
Quite right. If you dissipate the borrowed money, though, your net worth will go down by the amount of the loan. If you invest it, and the investment does better than the interest on the loan, your net worth goes up.
Good point, especially as to the homeowner, I think we can tweak the cases.
Though naturally the billionaire bribes an appraiser to undervalue all the new assets for tax purposes though, right? :)
Ok, half joking. More seriously I expect some large investment projects we could use have a value that will only materialize after significant work and capital are burned.
You buy a run down warehouse, the debt and building wash out, but you spend a ton of work turning it into the hip new place for aspiring restauranteurs... there's a gap before it's really obvious to the world what you're accomplishing. The debt for the building washes, but early expenses for clean up, refurbishing and advertising would look on paper like they're disappearing.
Maybe I should use a hypo like that instead.
The biggest problem is that ability to carry debt correlates with expected ability to pay in the future. If someone trusts you to borrow in a way where you immediately burn the money and spiral yourself way negative, however you manage to get there, odds are you are very well off or very convincing.
Net worth might be like a horseshoe. The best off might be those both way at the high end and millions in the negatives.
You are conflating the general use of the word asset with the specialized meaning with in finance. You can't sell your education back for currency and you can't put it on a balance sheet.
You could and people have tried to make derivative securities to commoditize people's educations and then you could try to literally sell your education (or more like future returns on your work based off your education) but until you do that it's not a liquid asset.
A house is a nearly guaranteed asset. The value will likely steadily rise throughout the years, and with good homeowners insurance you'll get paid even if the house is destroyed.
An education guarantees nothing. The neurosurgeon could die, or suffer an injury preventing them from performing surgery, or just plain quit and decide to pursue art instead.
Of course the neurosurgeon has a significantly higher potential future value, but it's an unrealized asset.
Also, it's possible to discharge a mortgage through bankruptcy, while student loans are much more difficult to discharge, so you're effectively stuck with that debt forever regardless of your career choice.
Like: 1.5% of neurosurgeons suffer an injury that prevents them from performing surgery. Then adjust all calculations based on this.
As with everything: to know if a single flip coin is going to be heads or not is basically impossible, but over a large enough number, you can be certain the number of heads will be close to 50%.
A single neurosurgeon? Who knows?
The entire population of neurosurgeons? Now we can use actuarial science and measure everything in micromorts.
This is a beautiful point. I feel in a country where the Government is stable most of the people would go for higher education thinking it is an asset. The real asset is tangible resources like a house, land, farm etc.
In a country where the Government is unstable it is better to have an education so that you emigrate to a better country with your education as the ticket.
So without the insurance, then the house would be similar to the neurosurgeon? A natural disaster could wipe it out.
And can't a Neurosurgeon take out equivalent insurance to cover the worst case scenarios that you described? I am sure I have heard of famous singers insuring their voices.
A house can be liquidated and potential profit realized rather quickly. Education, not so much. You can insure yourself (and should, if you could lose your work by getting in an accident), so that you get a set amount paid out each month in case you end up in a wheelchair or similar state that would keep you from working.
I see how a house can be considered an asset but if you sell your house where do you live? Sure you can downsize but it's still not purely an asset, you are using it at least in part to fulfill a basic human need.
It would be an investment and an asset, yes. If you take a loan for the smaller house you can pay it off using the rent of the bigger house. At the end you will have two houses. It can be a gift to your children as they do not have to struggle in life to buy a house which is a real pain.
Comparing it with education, you cannot transfer education and its value. It will die with you. In IT there is a chance that your education will get outdated really soon with no value. This is similar to the housing market but atleast in this case there is a chance that the market will go up. In case of IT education there is no chance and the value will hit zero. For your retirement a house giving constant rent is I think your most valuable asset as you never know if you outlive your retirement savings.
> I don't know how we disentangle all those when trying to measure or compare human welfare.
I think they just aren't very good metrics for measuring or comparing human welfare. There might not be any single or small groups of metrics that do any better either. It's a nebulous and complex thing that doesn't have easy answers. Of course in the hierarchy of human needs basic financial security to secure food, shelter, etc is pretty important and a precursor for positive welfare, but not really a sufficient condition.
Ukraine was dirt poor even before the war and their corruption index was higher than Russia's. Today Ukraine is in war and the most industrialized part of the country (eastern Ukraine) is partially occupied.
This measures "wealth", not income. You can be in the top 1% of earners, but if you save nothing, you can still have a net worth of $0.
Apparently, the median Ukrainian has only $40 to their name, by whatever means they measure wealth. However, Ukraine has compulsory socialized retirement funds. Minimum wage is $160/month.
The median US-American supposedly has 60,000$ to their name, which must be mostly due to IRAs.
Yes, I understand that wealth is not income, but in Ukraine there are plenty of oligarchs worth multi-billion sums. Dividing that wealth over whole Ukraine population is definitely more than 40$ per person.
Though probably that's where rampant corruptions comes in and I will just guess that rich oligarchs "on paper" have little to no official wealth in Ukraine (have no clue how wealth is calculated country-wise if it's international)?
> Yes, I understand that wealth is not income, but in Ukraine there are plenty of oligarchs worth multi-billion sums. Dividing that wealth over whole Ukraine population is definitely more than 40$ per person.
That's the arithmetic mean, not the median. The median is computed by sorting all the values from low to high and then picking the middle one. That's why it's a better measure for ordinary people. The few outliers at the top are not factored in.
Also, on that same chart, the US ranks #5 on mean wealth, and the numbers are way higher than in the linked article. Clearly this is highly dependent on how you measure.
You don't need to suspect. Unlike this news, Global Wealth Report itself is a serious undertaking so it computes both median and average ranking. USA is #1 in average and #13 in median. Switzerland is #2 in average and #1 in median.
The second decile in the US had in 2017 a wealth of $4798 (-962 for the first decile), while in France in 2015 the second decile had E12900, E4300 for the first decile.
Look at the median, not the average :-). It's hard to put numbers on quality of life as well: what does the median American eat versus the median French person ? How many vacation do they take ? What does they work, commute, family look like ?
It’s almost as if it’s part of a pattern, where the top 75% in the US do better than France, while the stronger French safety net is better for the bottom 25%.
How did you get from "slower internet" to "there is a pattern"?
If you scroll two comments up, you'll see the most crucial difference: free healthcare. Healthcare-related expenses can bankrupt an entire family in the US, even with great health insurance...
Then there is free education, but let's leave that aside for now.
That’s also consistent with the pattern. 75% of Americans have either employer paid insurance or Medicare. For those people, premiums and out of pocket costs are on average less than the extra taxes they’d pay in Europe for health insurance: https://www.assembly.ca.gov/sites/assembly.ca.gov/files/Arch... (page 18, showing 5.2% of household income spent on premiums and out of pocket costs). (Note that France doesn’t have free healthcare. It has a significant 30% co-insurance which is usually covered by private insurance. Non-premium out of pocket costs, which comprise 2.1% of the 5.2% above in the US, are only a little lower in the US than in France.)
Now, because the US has a weaker safety net, some people fall into gaps where they make too much to qualify for Medicaid and not enough to have good health insurance, or go bankrupt despite having good health insurance. But that happens to a small percentage of the population. Most people do fine with their employer paid insurance or Medicare, and get to spend their extra money on more consumption.
As to free education. If US colleges were like French ones, we could have free college too: https://mises-media.s3.amazonaws.com/styles/max_1160/s3/spen.... We spend more government money in higher education, as a percentage of GDP, than France. We still have to charge people tuition because our colleges are far more opulent. Most French universities are what Americans would consider commuter schools. Focused on instruction rather than research with most students staying local and living at home. Even then, free college just isn’t that valuable of a benefit. The average tuition at a public school in the US is $10,000 a year. The total cost of a degree is $40-50,000. And remember, most Americans don’t get a college degree (and neither do most French.) Over a career, the value of tuition free college for the average American comes nowhere near the extra taxes and lower income they’d have in France.
> Over a career, the value of tuition free college for the average American comes nowhere near the extra taxes and lower income they’d have in France
That's so bullshit.
What matter is of course not the difference between tuitions fees than taxes.
What's matter is that everybody, even the ones that can't afford the tuitions fees can access university. Which you can in France, which you can not in Europe.
I am the living example of that. I come from a family what would never have been able to afford me US schools tuitions fees. And still I am engineer, thanks to the European systems.
My Apologies for my early morning grumpy post, without re-reading.
Here is the more fixed one :
> Over a career, the value of tuition free college for the average American comes nowhere near the extra taxes and lower income they’d have in France
That is so bullshit.
What matter is not, of course, the difference of cost between tuition fees and taxes.
What matter is that everybody, even the ones that can not afford the tuition fees can access University and proper education. Which you can in France and most of European countries, and which you cannot in USA.
I am the living example of that. I come from a family what would never have been able to afford to pay US schools fees. And still I am engineer, thanks to the European system.
If there is a statistic you want to correct please suggest one. That said, the blatant misrepresentation of the US system as one where everyone is going bankrupt despite having health insurance makes me pretty grumpy too.
5 Year survival rates are a useless metric that don't say anything about patient harm from over-testing and over-treatment, or anything about all cause mortality. The US does better at 5 year survival rates because it's happy to cause harm to patients for no benefit.
You keep saying "The UK"[1] NHS denies treatment to patients, but you can't ever say what treatment is denied, instead pointing to stuff that's readily available. (Which is surprising, because if you actually cared about the truth you'd easily find examples of care that isn't available.)
I've never seen a post by you about the English NHS which isn't wrong. Doesn't it worry you that every single post you make about the English NSH is wrong?
[1] There isn't one NHS. There are 4 separate systems, controlled by different governments.
In practice almost nobody pays the sticker price for US unis. I would guarantee that you would be able to go to your choice of uni. Financial aid, scholarships, and loans are very very generous. A lot of the talk around the price of education is politics.
The other side of this is that in the European system many otherwise qualified individuals will never see higher education because there is so much competition for the limited spaces available. I would hazard to guess that most people arguing that US education should be more European would not be able to achieve degrees in such a system anyway due to early test scores precluding them from attending.
> The other side of this is that in the European system many otherwise qualified individuals will never see higher education because there is so much competition for the limited spaces available.
I tend to prefer a system where you fail because you are not good enough, to a system where you fail because the pockets of your parents are not deep enough.
"Not good enough" is compared to how many slots are available, many of the people forced out could be good enough.
The stories I have been told of difficult classes in the EU are mind-bending. They seem to be incentivizing ~80% of the class to drop out. There is no way the majority of people are not suited for, say, IT. They may not want to do it, but that doesn't mean they are not capable of doing it.
France pays less for healthcare than the US and gets more. A lot more.
To pick a statistic, their maternal mortality rate is 1/3 of the US.
Because the US is a wealthier country overall it can waste more money and receive worse results. That isn't an argument in favor the US healthcare system.
Also, do you realize that the graph you are citing isn't tracking the cost of US healthcare to a US citizen, it is literally saying Americans spend 5% of their personal income on health insurance. It is not counting the taxes they already pay, the cost to their employers, etc.
The point is that the cost of healthcare doesn’t eat up the income difference between the typical American family and typical European family.
Note also that trying to compare health outcomes between countries is extremely difficult. Asians in the US live longer than Asians in countries with excellent healthcare systems like Japan.[1]
Puerto Rico has a similar life expectancy to Denmark or Germany, even though if it were a US state it would be the poorest.
Maternal mortality rate varies by a factor of 10 between US states. The maternal mortality rate in West Virginia is only a somewhat higher than Germany and the UK, while the rate in New York is twice as high and New Jersey is four times higher. Massachusetts and California are lower than France.
[1] Asian American men live longer than white women.
School debt amounts to very little. Most Americans have no student loans. For the people who do, the median debt is $25,000, which is less than the average American new car loan. Even for recent graduates, 1/3 have no student loans and the average loan is $30,000. And the government limits repayment to 10% of disposable income.
The difference is that in France public hospitals do not overcharge public insurance, as private hospitals do in the US with private insurance and probably Medicaid too. Also, public health insurance is not a for profit business that aims maximizing profit at the expense of sick people. It's also easier to become a doctor in France vs. the US or get an equivalent degree from an Eastern or Central European country. France can also easily import doctors from other European countries, which lowers healthcare costs. Also, as a healthcare professional you are not as exposed to litigation as in the US. Canada seems to do ok with a very high barrier of entry for doctors however, probably because they have NPs which handle part of the doctors' workload.
As for education per percentage spending paints a distorted picture. A more thorough comparison is needed accounting for the cost of education, population size, absolute numbers as opposed to percentages. Otherwise I agree that the US has fancier, more exclusive higher education institutions and that professionals with a degree are paid much better than in France.
Sorry, but this is completely factually incorrect. France pays 1100 Euro per year per capita for healthcare.
Private insurance is a tiny cost of average 30 Euro and reimburses you for damages. Does not pay for healthcare. Entirely different kind of insurance.
In US, a single copay with health insurance can take triple this, most common ones are few hundred USD, baseline insurance is still expensive. However, yearly it's... Still more expensive as double the percentage of GDP than France.
The reason I quote that figure is because there is a myth that even though Americans mostly have private health insurance paid by their employer, they somehow still spend all this money on deductibles and co-pays.
The other figure I’m citing (the 5%) are not what Americans pay in total, but what Americans have to pay out of their salaries. The reason I cite that is most Americans have employed-paid insurance, which is not counted in their income. So if you just take income and subtract the total cost of healthcare per person, you get an incorrect number, because people don’t pay most of that cost out of their income. You have to look at what people pay out of pocket on premiums and copays.
> That’s also consistent with the pattern. 75% of Americans have either employer paid insurance or Medicare. For those people, premiums and out of pocket costs are on average less than the extra taxes they’d pay in Europe for health insurance: https://www.assembly.ca.gov/sites/assembly.ca.gov/files/Arch.... (page 18, showing 5.2% of household income spent on premiums and out of pocket costs). (Note that France doesn’t have free healthcare. It has a significant 30% co-insurance which is usually covered by private insurance. Non-premium out of pocket costs, which comprise 2.1% of the 5.2% above in the US, are only a little lower in the US than in France.)
I grew up in the lower middle class in France, and I have what's considered great healthcare in the US. In France, I would never think twice before going to the doctor (i.e primary care) when I had a medical issue. In the US, I still think it twice even though my copay is not a big dent in my budget. And that's not counting WTF happens in the US if I loose my job.
> I grew up in the lower middle class in France, and I have what's considered great healthcare in the US. In France, I would never think twice before going to the doctor (i.e primary care) when I had a medical issue. In the US, I still think it twice even though my copay is not a big dent in my budget.
That’s the point of co-pays, and that’s why France has them. According to the OECD statistics I posted elsewhere in this thread, per capita expenditures on non-premium out of pocket expenses (things like co-pays and deductibles) are the same in the US and France.
A doctor visit in France is 25€, the copay is usually 1€ (or 30% if you don’t have a complementary). My copay on my PCP in the US is $20. That’s not counting what happens if you do blood work, labs, if you go to an ER (where you don’t pay anything in France).
There’s more than an order of magnitude between those two numbers here. You can look at your OECD statistics, or look at the experience of people who’ve actually lived there.
The lowest income people in the US also qualify for free healthcare through Medicaid. It covers ~20% of the US population (that number also includes those with disabilities).
Medicaid isn't bad, it's better than many bottom-tier private plans, but it's also got some problems. For one, finding a doctor can be hard. Not so much with general practitioners, but definitely with specialists. Also if you're in the higher qualified income band, you can still get stuck with 10 to 20% of the bill, and making 150% of the poverty limit doesn't make you any better equipped to deal with $100,000 in expenses than if you made a little less money... It actually pays to be poorer. Not all prescriptions are covered either, level of coverage varies by state. Sure the pharmacy has to give it to you if you say you can't pay, but you still owe the money and can get sent to collections, have wages garnished, have to declare bankruptcy, etc.
Medicaid simply isn't the healthcare panacea for the poor that some make it out to be when they say, "But the poor already have coverage!". And it ignores the fact that there's millions of people just above the income cutoffs whose state of poorness is pretty indistinguishable from those that get coverage, but they're still completely on their own.
That’s what the ACA is for! For people up to 400% of the poverty line, the ACA caps premiums at 10% of income. That’s what you’d pay in health insurance taxes in France.
If we're talking about universal coverage in other countries and the potential for crippling healthcare debt in the US, then pointing to the ACA really doesn't help your argument here.
First: 400% of the poverty line is not very high, so premiums for people just over that line can still be very unaffordable.
Second and more importantly, ACA coverage is generally not very good, especially at the low silver tier covered in that %10 income cap. Pointing at the ACA ignores the fact than plenty of people with coverage still are faced with insurmountable debt, sometimes loss of home, and often bankruptcy. As long as hundreds of thousands of people each year have bankruptcies tied to medical issues, there's nothing about the US system you can point to, be it Medicaid, Medicare, ACA subsidies or anything else, that can surmount the argument that the US system fails people in this respect when compared to other countries with universal coverage.
I'm not saying those countries are always better in every respect, but one thing they have is that they don't cause their citizens to lose their entire way of life, their home, and ability to live above poverty levels when faced with treatable medical issues.
Actually 7% in France, basing it off budget for 2017.
The tax burden is higher because education, public transport, agriculture and social (mostly retirement) are paid in tax rather than mostly privately.
US has the private system for retirement plans and it sometimes fails utterly. The nationalized one does not, though it may not be as big of a payout.
And education saddles people with debt, as well as causes cost (admin) inflation.
It’s not free. Taxes in France are massive. It’s one of the highest tax to GDP in the world. That and inflexible labour law also comes at an additional cost: high unemployement and sluggish growth even when the whole world is doing great.
Yes, whole world is doing great, by which you mean China with 6,9%, Romania 6,9%, India with 6,6% and not USA with 2,3%. (Which is better than usual. 2017 numbers.)
Growth is not tied to employment policy, but only cost of labor. It correlates almost 1:1 as selfish big businesses move or outsource where it's cheaper. (Including big tax breaks. USA doesn't have these enough to balance very expensive employment.)
Example from EU: Poland has 4,6% and France 1,8%. Switzerland 1,1% and Finland 2,6%.
The number for France is not too dissimilar from USA and not anything special.
Poland has baroque labor (improving) and especially tax laws.
Clearly, it’s easier to grow when you start out poor, as you can play catch up copying the solutions and technologies from rich places. It gets much harder when you’re the leader, and not only you cannot copy tech from others, but you can’t even depend on them using you for cheap labor.
Do you think it is likely that the person you're replying to doesn't know this or are they simply calling attention to the fact that Medicaid recipients receive care that they themselves do not pay for?
Is the statement in some way unclear? Care to suggest a rephrasing?
> Medical bankruptcy was a big problem, but under the ACA the yearly out of pocket max has all but eliminated these
Not any more [1]. The Trump administration has sufficiently weakened ACA that you can now get insurance that isn't sufficient to prevent you from getting a huge bill if you have the temerity to have a heart attack or something else expensive like that.
Or you might not even have insurance, since they also killed the tax penalty for not having insurance.
Fiber optical connexion cost +- 30 euros and "unlimitted" 4G LTE mobile data plan cost +- 20 euros(including roaming). It's a lot more affordable than what AT&T or Comcast offer...
Maybe in pure dollar amount. As a German that lived in the US for a long enough time, I'd rather be poor in the Germany than in the US. As least I have good worker rights, healthcare, and all the other benefits.
I'm not sure it's an entirely fair way to define poverty. In many parts of Europe you can have a relatively high standard of living without consuming (or even owning) all that much.
For example, you can have a high standard of living without owning a car (and all the 'consumption' that goes along with that), in cities that have good public transport, and a good infrastructure/environment for walking and cycling. In much of the US, that's difficult or impossible.
But if consumption capacity was equal in Europe, that consumption would shift to something else, such as food and entertainment. People in New York City don’t consume less because they don’t own a car—they spend more money eating out, etc.
And Europeans are hardly ascetics. It’s fair to assume that in both places, if people had more means to consume they would.
> "But if consumption capacity was equal in Europe, that consumption would shift to something else, such as food and entertainment."
Yes. But my point is that not all consumption can be considered equal in terms of the wellbeing and quality of life that it provides.
For example, if I was spending $5000 per year on car payments and fuel for my commute to work, that's a lot of 'consumption'. But it isn't something that makes me happy or feel fulfilled.
On the other hand, suppose I live in a city where I can walk, cycle, or ride a tram to work. My quality of life might be equal or better - yet I'm consuming $5000 less.
Americans could live in a city where they walk, cycle, or ride a tram to work. For the most part, they don’t want to. They used to have such cities, but they ripped up the tram lines and put in freeways. (Part of that is because most of the US is quite unpleasant to walk or cycle in from a weather point of view. The average high in Amsterdam, a famous cycling city, tops out at 72 degrees. In Atlanta, it’s 80+ from May through September.)
Napoleon had the same problem with his soldiers, and solved it with lots of sycamores. Atlanta could put some temporary structures to give shadow also.
Consumption habits don’t vary that much in the developed world. The household savings rate is 5-10% in most countries, with the US being lower than famously frugal Germany, but higher than Italy or Spain: https://www.gfmag.com/global-data/economic-data/916lqg-house.... (Switzerland and Luxembourg being heavily financialized countries seem to be outliers.)
One interesting thing I found comparing UK towns to Australian towns was the UK towns allowed a much higher quality of life because road and house block sizes were calibrated to walking, whereas Australian roads are all calibrated for two way car traffic and block sizes are huge. There is also an assumption that if you want to buy something you will drive to a local retail distribution point. It forces people to spend a lot more on transport to get the same lifestyle.
I'm not a fan of cars. It'd be nice if they were toys for the rich and Australian cities were built around everyone walking around or catching public transport.
But that does depend on luck say 20 years ago you brought a council flat in London in Westminster or those ones next to blackfriars with a view of the Thames - yes you can.
Living centrally in Paris, London etc is not cheap.
Is consumption defined as spending, though? If an apple costs $1 in the US but 25 cents in Europe, and a poor person in each place is provided a free apple by the government, did the poor person in the US have 4 times the consumption?
Well, you try to adjust by Purchasing Power Parity. That works well for things where you can directly compare, like the price of an apple. However, it doesn't work so well for other goods and services, e.g. single payer health care vs health care costs in the US, because at best you're comparing apples to oranges.
On top of that, it does not account for things you may need in one nation but not in another. E.g. cars spring to mind. In the US you need a car in most places even the bigger cities, to get to work for example. In a lot of places in the EU you don't.
Having a car and being able to drive it around is a form of wealth. Cars in the US are also much more affordable.
The "I don't need it" argument only goes so far. You can't go shop a lot of groceries. You can't transport bigger items. You can't go on a road trip. You travel according to whatever public transport affords you.
I might just as well say "I don't need it" in regards to healthcare. You don't need it until you do, but then you can't afford it.
The world bank says that we shouldn't compare consumption since it is calculated differently in different countries: "Because of the diversity of methods and instruments used by the surveys, comparability across countries is limited."
I wouldn't be surprised if the American value was grossly inflated by things like expensive healthcare and education, while the study in for example Sweden possibly didn't even count free healthcare visits, free college education, free school meals for everyone, free public transit for kids or free kindergarten as household consumption.
That uses consumption data for 2010, coinciding with the year the EU financial crisis really hit and dominated the news, while the financial crisis in the US was already in downswing.
Given that the US unemployment rate has been constatnly trending down since 2010, I guess the lack of improvement or even worsening of consumption in the same time frame say something...
* How we do in terms of relative consumption along the percentiles, since that reveals how well we distribute consumption among working people. I believe that by moving savings into consumption we increase aggregate welfare, as spending by the people that receive the cash injection will end up generating more consumption than there would have otherwise been. However, I suspect that the current level of income inequality is also what's preventing massive inflation from occurring so it's something of a wash.
* As well as how our even lower percentiles compare to other economically developed countries. 5% of America is something like 15 million people, or ~two Washington State's
* Lastly, it might be interesting to look at what people have to do to earn the consumption they get at the 20th percentile. A lot of people in America are out their working 80 hours in minimum wage jobs to do that.
As a soap box: imo the biggest issues with American socioeconomics today are more about mobility and safety nets than about how much the poorest can absolutely afford. Like, do we do a good job of enabling people to improve their situation and do we do a good job of helping people stay there once they have made it through e.g., helping with substance abuse problems, mental health, and unexpected debt burdens, among other things.
That's such a bs article: The World Bank’s “preferred” indicator of material well-being is "consumption" of goods and services. This is due to “practical reasons of reliability and because consumption is thought to better capture long-run welfare levels than current income.”
So all it says it that the poor from US consume more than middle class in Europe. Of course, being to the US and seeing how they replace things disregarding the environment I'm not surprised by that conclusion.
I'm earning six figures in London and I'm consuming a lot less than the poorest in US and try to reduce it as a maximum so my carbon footprint is small.
When I went to France I saw so many people bringing their own containers to the supermarket which was great because it reduces consumption.
"The high consumption of America’s “poor” doesn’t mean they live better than average people in the nations they outpace, like Spain, Denmark, Japan, Greece, and New Zealand. "
this is actually a huge negative and flips the result on it's head if you look at it from a climate change perspective.
EDIT: if they have to consume so much more, surely they are not having it better
You read the part where they say things are not really comparable because different nations use different definitions, right?
E.g. if you scroll in the article you will find that Germany reports as homeless: "Living temporarily with family and friends due to lack of housing", "Living in institutions"
"Living in institutions" is clarified as: "Including people who stay longer than needed in health institutions needed due to lack of housing; and people in penal institutions with no housing available prior to release".
The US does not count these categories.
Now, it would be interesting to see how the numbers would change if the US actually counted all the millennials who moved back in with their parents because they could not find an affordable place, and all the prisoners and parolees who stay with relatives.
I'm European and I've been to several major cities in the US. I've also visited most european capital cities.
In both cases, as a tourist, I never go too far away from the popular places and never been there for most than 3 or 4 days.
Don't know the reasons (honestly) but the homelessness and poverty I've seen in the US is nowhere to be seen in Europe. I repeat, in "popular" places and vicinity.
How do they come out with such numbers? Is the impression of a tourist wrong? Where are the poor and destitute in Europe compared to the US?
Different countries define and count "homeless" in different ways.
Some places will only count rough sleepers, and they'll do that by once a year sending people out to count people who are sleeping on the streets. This obviously severely undercounts those who are homeless.
Other places will have a definition for "statutorily homeless" which will include people living in bread-and-breakfast style accommodation - emergency short term lodgings funded by the state.
It sounds like these statistics are utterly useless for national comparisons
> About half of the surveyed countries also cover people living in non-conventional dwellings and people living temporarily with family and friends due to lack of housing,
> In Sweden the official figure given by the National Board of Health and Welfare includes lots of people who don’t have a permanent home but aren’t living in shelters or on the streets. For instance, Sweden includes people set to be released from jail within three months and have nowhere to go
I live in Canada, and have been to many US states. This doesn't reflect what I've seen in the least. Even if it is true, it still doesn't change the fact that if the poorest 20% is richer than Europe's middle class that you have more than enough resources to do something about it.
I saw a ton of people sleeping on mattresses and blankets in German train stations last time I went. Were they just enjoying their freedom from the pressures of society?
This literally does not happen in normal operation (because train stations security or police aided by social workers will direct people to homeless shelters, or make them leave if they refuse homeless shelters), and only happened a few times during the height of the refugee crisis in the big cities with new arrivals coming in at a rate where the refugee and homeless shelters in those major arrival cities were overloaded and bureaucracy was too slow to process and re-distribute these arrivals quick enough to avoid some camping in train stations.
The wikipedia article explicitly states:
> This is a list of countries (not all 195) by the homeless population present on any given night. Different countries often use different definitions of homelessness, making direct comparisons of numbers complicated.[3]
For Germany it further states:
>*Includes around 350000 refugees in temporary housing or awaiting asylum.
Temporary housing might be shit, but it's still better than living in a cardboard box on skid row. Unless your government provided temporary housing is a literal cage, of course, but we don't have those here.
In Germany "homeless" includes all people who do not have a permanent residence, i.e. people living on the streets but also people who e.g. temporarily live with relatives or friends, e.g. because they have a hard time finding an affordable place in the overcrowded big cities.
PS: I was "homeless" for about a year in Germany. I was looking for a new place after uni, couldn't find one due to overcrowding in the city I was looking in, and stayed in my parents' house during that time, just like I did in my youth. I had a better life incl more privacy there than I previously had with some roommate arrangements. But I was technically homeless under the definition they use for the stats.
I mean, it's not like they were wrong about that. I don't know what to conclude from this other than most of history is terrible and the present often isn't so great either. Until we live in a utopia, there will be no shortage of targets for whataboutism.
The point is that it's nothing but a deflection tactic, and I don't believe the people doing the lynching were typically the same people concerned about human rights abuses in the USSR. It's an oversimplification used to prevent discussion about real problems.
I think there is a valid point to it – there is a certain degree of hypocrisy in criticising other country's human rights problems when you aren't doing enough to resolve your own country's human rights problems. Calling it "Whataboutism" seems to excuse that hypocrisy rather than giving it the condemnation it deserves.
I'm not defending the Soviet Union, which was truly a horrible regime.
What I'm saying, is the proper response to a criticism of lynching, is to agree with the criticism, not argue that the crimes (no matter how horrid) of those who are making the criticism renders the criticism invalid.
Agreed. You're right, it is hypocritical. There was fierce fighting between two sides of the civil rights issue during that time though. We weren't doing enough, but many people were trying.
Texas has literal shanty towns with 100,000 American citizens living there so I think this is a situation where statistics (or the ones presented) are highly inaccurate or deeply mischaracterized:
The Texas colonias are inhabited by people who crossed into the US from Mexico. There are many Americans citizens there because everyone born in the US is automatically a citizen. But their standard of living says nothing about the accuracy of the statistics addressing the standard of living at the 20th percentile. (That’s 60 million people from the bottom.)
That’s not to say we shouldn’t “do something” about their living condition, just that your post is a non-sequitor. When Sweden accepted hundreds of thousands of refugees, the median income of the country almost certainly went down. But that doesn’t mean everyone became poorer.
The post I am replying to claims that the "20% poorest" in the US have it better than middle-class Europeans which is such a ludicrous claim as to require posts like mine to provide the context of reality.
To your stuff about Sweden and refugees, income and wealth are related but separate concepts.
But you’re not replying to the post! Pointing to the plight of people in the Texas colonias tells you literally nothing about the point made in the post you’re replying to. If it was talking about people at the bottom 3% you’d have a point.
As to your changing the goal posts by talking about healthcare. There is nothing “perverse and dishonest” about measuring which country is the “richest” based on capacity for consumption. The vast majority of Americans, even at the 20th percentile, will never go bankrupt due to medical bills. But they will all get to enjoy much higher consumption (bigger houses, more cars, more TVs) than the average European. (And maybe, just maybe, Americans aren’t irrational and simply prefer the trade off they have made.)
Now, you may personally value the security of not having the possibility of crippling medical debt over the potential for higher consumption. I probably would too! But it’s not so obviously the only correct way to view things that it would be “perverse” and “objectively dishonest” to measure which country is the “richest” in a way that doesn’t place dispositive value on that security. Put differently, you’re simply defining “being rich” as “being secure.” That’s not the only way to define it.
For some perspective Bulgaria, an EU member state, has a population of 7 million and an average salary of around $700 per month, or $8,400 per year. That would put you way below the poverty line in the USA.
Minimum wage in Texas is $7.25 an hour. A full-time minimum wage worker in Texas can surpass the average Bulgarian's monthly wage in under 2.5 weeks.
And that's just the average wage. More than half of the 7 million residents live below that. For every cherry picked colony in Texas, there's several even poorer villages in the post-Soviet states to cancel it out.
That is in pure $$. According to wikipedia, the PPP according is $24,485. There is 80-90% house ownership. Income tax is 10%. It's hard to make a reasonable comparison like that.
Another example is Czech Republic, which has the lowest poverty rate in EU - under 10% before Finland and Netherlands. And yet it's way after them in the wealth list.
God only knows what we Americans (and Canadians, for that matter) are doing with our disposable income, but the median Schweizer, Norwegian, American, Australian, or Canadian is doing pretty great.
And the US ranks ahead of both Germany and Sweden in median household net wealth. Those two are almost universally held up as extreme achievers on quality of life and both have notoriously good economies.
I don't know about Germany, but Sweden has one of the highest private debt levels in the 'western' world. That seriously drags down the net wealth numbers. Also the whole point of the "Swedish model" argument is that a high net wealth shouldn't be a requirement for a high quality of life.
True. It's interesting to note that the ratio of the median to the mean for Germany is similar to the US, where France and other high-medians have smaller ratios. Why is wealth more naturally distributed in France, but less so in Germany and the US?
Income inequality has only been increasing over time in the US, and GDP climbs while deaths of despair (drug overdoses, suicides) go up and life expectancy goes down.
Misleading stat is misleading. Page 47 of the source (https://www.allianz.com/content/dam/onemarketing/azcom/Allia...)
:
"By average net financial assets, the USA are
the richest country in the world, not least
thanks to the strong dollar. But if we drew up
our rankings of the world’s richest countries
based on median values, they would look
different. The US would slide by a whopping
12 ranks from the top spot to 13th place. Also
Singapore (from third to sixth place), Sweden
(from seventh to 12th place), Denmark (from
tenth to 22nd place) and UK (from 12th to 16th
place) would drop significantly. In all these
countries the difference between median and
average values tend to be bigger than in most
other countries. For all countries analyzed, the (unweighted) average for the median value
expressed as percentage of the average value is 44%. In the US, in contrast, this number
is just 15%; in the UK and Sweden it comes to
around 30%"
I do agree with you, but I must point out that hiding income from the government is a very common practice. Probably a quarter of the people I know have significant under-the-counter income sources they feel no need to include in their taxes.
If I have a billion dollars, and start a country that consists of me in my palace and 2000 other people living in abject poverty, we are now the "richest nation on earth" by this definition. Big whoop.
Except your country would be very poor, because you'd have either another country's currency, or you would have a $1bn trade deficit and little actual wealth - thats after you somehow get yourself some UN recognized sovereign territory
For example: The US has a median/mean ratio of 15%, which is very low (ranked with the bottom 10 of countries), where Egypt, Kazakhstan and Ukraine are at the bottom.
One of the more baffling statistics I’ve seen lately is that consumer debt continues to increase and credit card interest rates are at multi year highs despite the fed funds rate being at historical lows. Things don’t add up.
Sounds like the credit card companies are expecting a vanishing fraction of the people for whom credit card interest is relevant to actually pay them back...
(At least among my family, common knowledge is to treat credit cards like debit cards or charge cards - make the full payment, every time, and if you can't make the full payment you shouldn't have made the purchase)
Maybe creditors are having trouble finding attractive returns, so they are lending to riskier individuals. Similar to the 'reach for yield' phenomenon in the bond market.
Visit Zurich. Prices are ~2x what they are in my (fairly pricy already) area in the US. That's the direct consequence of high median income: businesses charge what the market will bear.
The high price of the CHF also has something to do with it. I visited the French-speaking part of Switzerland a couple of summers ago (Geneva and Lausanne) and at some point during that visit I realized that those two cities (and the rest of the Swiss cities, of course) were among a very short list of European cities not directly affected by war in the last 200 years or so. Under these circumstances of course that everyone will be busy giving the Swiss their money and valuables for "safe keeping", which among other things translates into said high price for the CHF.
It seems like if you are slightly more business-friendly than competing countries then you have a big advantage (not to mention network effects), but if everyone tried to be more like America then the world would be worse-off.
Probably because the income inequality is higher. If you think of some famous super rich people I am sure most of the names you think of will be from the US.
Mean wealth is not very meaningful. What is the median in the two countries? Better still what does the distribution look like and how does it compare to other countries?
Going to that link I was punched in the face by about 20 ads and saw one sentence of content that basically just restated what was in the title... did I miss something?
I'd be curious to see the proportional gap between the top 10% and bottom 10% compared. My guess is a much larger gap in the US, but I wonder by how much.
I am as American as they come but wealth as reported by this article is a false metric. The Swiss have an amazingly high quality of life and standard of living. For most Americans, I don’t think our quality of life is anywhere near what it is in Switzerland.
What is the point of this article other than to make the internet more dumb?
Say Bill Gates moves into a town of 10,000 people. Congrats! The average wealth of that town per person is now over 10 million. Everyone is a multi millionaire.
Debts make this comparison difficult to make meaningful.
A few cases:
- Minimum wage earner barely scrapes by but does not seek any credit.
- Someone in a high cost of living area takes out a mortgage.
- A young neurosurgeon with fresh educational debt takes on a very high paying job.
- A billionaire borrows to finance a major real estate project
The net worth of these cases goes from highest to lowest. The "means" run in the opposite direction.
Sometimes indebtedness is poverty. Sometimes it's consumption smoothing. Sometimes it's a reasonable investment in a home or earning potential. Sometimes it's a dangerous source of leverage on a foolish bet.
I don't know how we disentangle all those when trying to measure or compare human welfare.
> the strength of the US dollar [also contributed]
If high Swiss property values and a strong US dollar conspire to to flip the #1 and #2 countries on this specific metric, I'm worried we're drifting into Spaceballs territory. What's all this mean? Possibly... absolutely nothing.