American Economic Hubris

I have been through macro and micro econ classes, read a few books otherwise on economic topics, and experienced life, but I am certainly not an economist. I am just wondering why so many Americans think that their economic system is the best? I want to see the data that backs up the hubris I have seen over the last few decades. If the system is so much better than the "socialist" systems in Euroland or Canada, Australia, etc. then there must be a lot of data to back this up. Where is it? For the median citizen that is. Here is some data...

Canadian Family Median Net worth 2005
Age of head of household
< 35 18,750 $C
35-44 135,408
45-54 231,900
55-64 407,417
65+ 303,167

USA Family Median Net worth 2004
< 35 14.2K $US
35-44 69.4
45-54 144.7
55-64 197.4
65+ 177

am i missing something? I was a bit surprised by the data. The Canadian dollar is getting back to near par with the US dollar. Also, Canadian net worth is actually up since these numbers, whilst the US is down. Canadian real estate did not implode like the US, nor did its banking system. Perhaps more importantly, if you add in inflation and national debt load to the numbers here, the US drops dramatically, whilst Canada does not.

I also looked at taxes in Canada versus US, and the Canadian tax system actually seems to penalize wealth less than the US system.

Can somebody please enlighten me as to what I am missing? I am tired of hearing about the wonders of pure capitalism, whilst seeing the opposite in reality. I see Europeans getting 5 week paid vacation per year, free health care, less working hours per week, more job security, and more employee rights. I mean, if the American dream of becoming rich is seemingly not working out for the average bloke on the street, then what is the point of this blind faith in the nearly lassez faire system? Oh, forgot, it does work well for the top 5% though.

One key point you are missing is that the Canadian dollar has taken a tumble vs. the Greenback in the past week ever since China announced they would rein in their banks. Far from reaching par with the U.S. currency we have sunk to under 94 cents U.S., a drop of over 3 cents in the past week. We are barely over 30 baht to one of our dollars. The thinking is that China will want fewer of our resources, and so the Canadian dollar fell.

This is frustrating as I would like to see us reach par with the U.S. at least before I go to Thailand again.

You're comparing net worth from two different years using two different currencies.

The reason some view it as hubris is because they see it as the standard. You're free to find another country's economic model to constantly measure-up to. It's not mandatory you compare every aspect of your life to America. It's something you do voluntarily.

Good luck, and remember ... tripping the fastest runner in a race does little to improve your time.

Texpat wrote:Good luck, and remember ... tripping the fastest runner in a race does little to improve your time.

And constantly dismissing all race times because the event did not take place in your country does not improve your time either!!!

The tables show a difference in net worth that is not going to be compensated for by short term aberrations in the exchange rate. For decades the Loony was just that, a joke. But, over the last decade or so, it has been the stronger of the two currencies.

The difference from one year to the next in net worth data isn't going to change more than a few percentage points as well. Also, the USA has definitely been hit much harder than Canada over the last two years!! Talk to somebody in Florida who lost 90% on the condo they bought in 2005, and if they try to be honourable people and not walk away from that disaster, then they will probably NEVER be able to retire. Throw in the national debt and the US comes out far far worse.

I compare to the USA, because it where I have spent most of my life. I believe I have earned the right to criticize the USA if I want. It's a love/hate relationship... just like Thailand I just wish Americans would open up their eyes, travel a little more abroad, and see that there is more than one way to skin a cat. Nationalism is another scourge in my opinion.

Anyway, I thought perhaps I had bad data, so far it doesn't seem that anybody here has rectified it. So, my conclusion from that data is that what most people think about the relative level of wealth between the average person in those two countries, as in, Americans are rich buggers and Canadians aren't.... should be discounted. Of course we are not talking about the 1% at the top

Comparing yourself to rural Chinese farmers might improve your relative standing even further. Go for it!
I've heard Canadians are far more affluent than the average North Korean. By miles!

Why can't you be content to just feel comfortable in your own skin?

rjj04 wrote:I have been through macro and micro econ classes, read a few books otherwise on economic topics, and experienced life, but I am certainly not an economist. I am just wondering why so many Americans think that their economic system is the best? I want to see the data that backs up the hubris I have seen over the last few decades. If the system is so much better than the "socialist" systems in Euroland or Canada, Australia, etc. then there must be a lot of data to back this up. Where is it? For the median citizen that is. Here is some data...

Canadian Family Median Net worth 2005
Age of head of household
< 35 18,750 $C
35-44 135,408
45-54 231,900
55-64 407,417
65+ 303,167

USA Family Median Net worth 2004
< 35 14.2K $US
35-44 69.4
45-54 144.7
55-64 197.4
65+ 177

am i missing something? I was a bit surprised by the data. The Canadian dollar is getting back to near par with the US dollar. Also, Canadian net worth is actually up since these numbers, whilst the US is down. Canadian real estate did not implode like the US, nor did its banking system. Perhaps more importantly, if you add in inflation and national debt load to the numbers here, the US drops dramatically, whilst Canada does not.

I also looked at taxes in Canada versus US, and the Canadian tax system actually seems to penalize wealth less than the US system.

Can somebody please enlighten me as to what I am missing? I am tired of hearing about the wonders of pure capitalism, whilst seeing the opposite in reality. I see Europeans getting 5 week paid vacation per year, free health care, less working hours per week, more job security, and more employee rights. I mean, if the American dream of becoming rich is seemingly not working out for the average bloke on the street, then what is the point of this blind faith in the nearly lassez faire system? Oh, forgot, it does work well for the top 5% though.

As an American I think what you're missing is a basic understanding of the capitalist system and who it rewards. It IS NOT a system designed to distribute wealth. It is designed to reward those who can work smarter, harder, and yes those who have superior intellect and/or generational wealth. In that regard the system has worked wonderfully well as evidenced by the following:

Total Net Worth (USA, year 2007)
Top 1% (of population)___34.5%
Next 19%______________50.5%
Bottom 80%____________15.0%

---------------------------------------

Financial Wealth (USA, year 2007)
Top 1% (of population)___42.7%
Next 19%______________50.3%
Bottom 80%_____________7.0%

* financial wealth = total net worth minus the value of one's home
-----------------------------------------

I'm a prime example of the 'average bloke on the street' to borrow your words.
At age 30 I had a net worth of $5,000 USD. I retired at age 48 with a net worth of 1.2M USD. I did it through a combination of working long hours, saving, investing, and hitting the economy at a good time (in other words lucky ). I did receive a small percentage of my net worth from my parents who have willed me some land.

As a contrast, my best friend in high school (also college education) squandered his money, had no investment strategy, and became an alcoholic. He commited suicide recently.

The American system seems to follow Mother Nature's course. The smarter and stronger rise to the top of the pack and get the 'good eats' while the others fight for the grisly 'leftovers'.

-------------------------------------------
To sum up, I think you're comparing apples & onions. One system is designed to cater to the whole will the other is designed to reward the few. That's why the 'median' charts you have presented favor Canada. Which system is 'better'? That question can be debated forever; depends on your POV.

rjj04 wrote: Nationalism is another scourge in my opinion.

Agree 100%.

LoveDaBlues, why do you think I chose to use the "median" data?

We have a very similar history then, LoveDaBlues.... quite similar. I concur, the US is a system where societal Darwinism prevails. It is cloaked, as if the government really is there to help the "median" citizen. I thought we, as the top species, might try to go beyond that concept one day. Oh well, another false hope

I think Nietzsche said something like, if your neighbours house burns down, give him shelter. Just make sure you give him
a very uncomfortable bed, and you feed him tasteless gruel, so as to help push him to get back on his own two feet.
In the US, the bed is one of nails, and the food is made from sawdust.

I think you chose to use the 'median' data to prove the Canadian system is better than the US system. You have succeeded with regards to others that share your mindset of what a national system should be about.

Never having been a fan of economics courses or ?theory?, here's how I measure up the US?
1. I've been to Thailand, Korea, Taiwan, Okinawa, Panama, Germany, England, Saudi, Greece. They all had their pluses and minuses. But in none of those countries did I see a standard of living for the masses comparable to the US. Maybe my eyes are diseased, but that's how it looked to me.
2. My grandfather was a shoemaker, grandmother a hairdresser, my father worked in the same factory for 52 years, as a phone operator, my mother connected Liberace when he made long distance phone calls (she swears she never listened in) . In my father's family, only the youngest son (of 11 children) received any college education. My mother's side had no college graduates. My 5 brothers and virtually all of my cousins and nephews/nieces have above average jobs. Nearly all have a college education and a majority have masters degrees. Only my youngest brother doesn't have a college degree. He worked his tail off until he was 50, then bought a rug cleaning truck and grosses about 120k a year working alone....now house/business are paid off, he has a tidy retirement fund, and looking forward to retirement in another 5 years or so.
3. I've known a few Laotian families, Thais, and Polish families immigrate to the US, with not much more than the shirts on their backs. Now, they all own homes, cars, and either have small businesses or good paying jobs. Their kids have good educations and better jobs than their parents.
4. I retired when I was 46, not a wealth of savings, but enough to take a chance on moving here. In the early days of retirement, I felt a bit guilty when folks asked me what I did for a living.

In the end, I don't know how that measures up to Canada or any other country. I just know that for those willing to work hard, save, invest wisely, and stay out of trouble, the US is a land of opportunity.

Personal testimonials not permitted. They don't fit the OP's foregone argument:

Americans are rich buggers and Canadians aren't

.

Canada is just raking in the cash. Burying everyone with opulence! I'd move there if I had a snowmobile, a sourdough sample and a pair of killer sun goggles. It's why everyone is clamoring to immigrate there.

Don't ever feel guilty for working hard and retiring early. It's a fact of life many here resent.

Furthermore, there is the great weather. It was -25 degrees C. this morning in Toronto. No snow though.

Added to this is the fun one can have darting amongst cars, trucks and trams as one negotiates their way across the street on a red light whilst listening to your i-pod or speaking on your cell phone. Fourteen pedestrian fatalities in the past two weeks shows you just how much fun can be had, eh.