US Economy Fine

In a world where we hear about China's new superpower status every day, Gerard Baker points out a couple of obvious points. The US, if it grows at 5% expected in Q1, will have added roughly double in absolute terms to the world economy, compared to China in the same period. This is equivalent to the addition of another Brazil to global GDP numbers, which isn't bad, considering all the MSM talk about the US economy being cooked.

One word of warning however:

The only real threat to American economic hegemony, I suspect, is the willingness of its people to continue to tolerate the pains associated with its success. Income and wealth inequalities have grown rapidly in the past ten years — even as the long-term growth rate has accelerated — and, given the continuing direction associated with globalisation, they may get even worse over the next 20 years.

That could tempt Americans to turn their backs on the very free markets that have been the foundations of their continuing prosperity.

I generally believe there is some widening of inequality in the US, but I also believe it's generally a political factor that Democrats and MSM like to point out to support higher tax inititives. So even though almost everyone is becoming wealthier (as a generality) every year, they use the disparity issue, which is ridiculous, since a poor immigrant might be able to improve his net worth by 5-10%/year or say $1000, but this will not compare with Bill Gates' likely increase of $3 Billion - thus a disparity. Nonetheless, many fall for it, and therefore vote Democrat.