Wednesday, November 15, 2006

European Vs. American Economies

Over at Backtalk, there are charts and discussion of Western economies. The key item, to my mind, is that the poorest 10% in America have the same after-tax spendable income as those in the wealthiest European countries. I had not visited the site before today. The host identifies himself as a liberal Democrat college professor from California. Not who I would ordinarily expect to be touting the American system. But there we are - people don't fit my prejudices.

Considering how many immigrants, legal and illegal, that we are absorbing, that seems pretty darn good. Additionally, the bottom quintile (20%) in the US, ten years later, have about equal chances of being in any of the five quintiles in income. Because of the (justified) attention paid to children in single-head-of-household families, we tend to think that this group makes up most of the poverty group. Not so. Sprinkled in among the bottom quintile are graduate students, newlyweds, and new immigrants. The chronically mentally ill, whose prospects do not change much from decade to decade, make up about one-fifth of those below the poverty line.

3 comments:

Anonymous said...

Ironically enough, the fact that, "...the poorest 10% in America have the same after-tax spendable income as those in the wealthiest European countries..." seems to lend itself to the socialist view.

I mean, in Europe, the poorest can still do a lot of things that the poorest in America can't. A very poor person can take trips across Europe for free on the railroads. They get free healthcare. They get free housing. You get the point...

Although, one of the commenters pointed out that after government aid, the poverty rate in Germany was 16%. Before government aid in the US, it is 10%.

AVI, what significance did you place on the "lowest 10% incomes" being equal? Maybe I am just misunderstanding something...

---BubbaB

Assistant Village Idiot said...

The lowest 10% in America also (generally) get free healthcare and heavily subsidized (though not free) housing. Train trips, I concede, are not provided here.

There are also the benefits available to all - parks, fire department, schools, libraries - which I suspect are roughly comparable in industrialised nations.

Anonymous said...

Good point. I wonder what the tax rate is on the poorest 10% in the US versus the poorest 10% in Europe?

Sure, the bottom 30+% in the US don't pay federal taxes, and rarely do they pay state (income) taxes, but what about the "other" taxes (sales tax, gas tax, etc.)?

Hmmm...

By the way, another excellent article you have referred us to...

---BubbaB