February 13, 2005
We can't help but be entertained by those who claim that the US economy is sluggish. This well may be true for parts of the US economy such as Western New York, and most of New York State, which has yet to meet the average growth of the total economy. But look at the total picture of the USA.
M.A.B. I can't understand the reactions to the recent projections that US growth is 'sluggish.' This was the response to recent data released by the Organization for Economic Cooperation and Development, when the forecasted growth for 2004 was 4.4%. By what standard could a 4.4% increase in the US GDP ever be considered 'sluggish'?
R.L.H. Indeed. For an Economy, this is approximately one third of the worlds GDP, and is so expansive that one of every three units of GDP is US in origin. An economy of the size of the US is the growth engine of the world. So, by what standard is the projection of 4.4% growth over 2004 anything less than heroic?
M.A.B. The US growth was the greatest among developed nations at a rate of 4.4%. The next closest was Japan, less than half the size of the US at 4%, but still impressive. However, smaller economies like the UK's saw 2.7% growth, 2.1% for France, and an anemic 1.2% for Germany, less than their respective rate of inflation. The EU zone saw total growth at approximately 1.8%, or less than half the expected growth of the US. Does anyone seriously expect such anemic growth in Europe to economically rival the US as a trade and development zone? Not as long as we continue our impressive growth.
R.L.H. That is understandable. There is no chance for such performance to rival the US. If Europe continues to grow at such a rate less than the US, the only nations that could ever come close to eclipsing the US economy during our lifetimes are China and India. With the EU growing at a rate less than its rate of inflation, it is hard to see how their economy will ever rival the US. So then, no other developed nation had a growth rate anywhere near the US, with the exception of Japan. Most other developed nations struggled to grow faster than their inflation rate. You know, it is a mystery, how can anyone say the US economy is 'Sluggish'?
M.A.B. They can't be serious. Perhaps they mean that relative to previous growth the US economy has been sluggish. Nevertheless, the facts refute this argument as well. During the Reagan Administration, which included a recession in 1981 the average growth over those years was approximately 3.4%. By what standard could any reasonable person say that 4.4% is sluggish? Again, during the Clinton years, which included a recession in 1992 and 1993, the growth rate averaged 3.3%. And during the last term of the Clinton years, the years of the great economy of golden opportunity and growth, the average of those four years was an impressive 4.25%, just below the projection of 4.4% for 2004.
BOTH IN CONCLUSION: The facts speak for themselves. Any growth rate, which averages above 3%, is good; anything above 4% is excellent. The United States has led the world in economic growth, development and opportunity. Even in years of slower growth the US still outpaces the rest of the Western World, so then next time you hear about that "sluggish" Economy here in the US, "ask relative to what?" That's how we see it FROM OUR PERSPECTIVE.