U.S. vs. The World

[Camaero]

THE U.S. ECONOMIC MAP VS. THE WORLD

Yesterday, the market capitalization of Chinese state-owned oil company, PetroChina, hit $1 trillion -- eclipsing U.S.-based rival Exxon as the world's most valuable company. Last night, at a lecture in Manhattan, I heard George Soros predict (yet again) that the unraveling of the U.S. economy had finally begun. Last week, a London-based financial newsletter called the United States “the next Argentina” -- suggesting that the U.S. economy's destiny was to echo the fate of Argentina -- a formerly prosperous nation that descended into poverty and economic chaos. It seems that anytime financial markets have a bad week or two, the global financial press readily hitches itself to the doomsday bandwagon by cheerfully predicting the demise of the U.S. economy.

At times like this, it's worth reminding ourselves that we've been here before. In the 1970s, Americans grew up with two myths. First, that the Soviet Union would dominate the U.S. militarily; second, that the Japanese would dominate the U.S. economically. With the Soviet Union erased from the map, and the Japanese stock market below levels it traded at 17 years ago, both fears seem almost quaint. Yet today, the conventional wisdom that Brazil, Russia, India, and China -- the BRIC countries -- are set to dominate the United States is just as prevalent.

The U.S. Economic Map: Size Matters

In the midst of a housing collapse and credit crunch, the impending doom of the U.S. economy is taken as gospel. But look behind the headlines, and the numbers tell a different story. The U.S. economy grew by 3.9% in the credit turmoil-ridden third quarter -- following a 3.1% jump in the second quarter. That means that the United States added the equivalent of a new Saudi Arabia to its economy just since the beginning of April. And the fact that the World Economic Forum ranked the U.S. economy the most competitive economy in the world last week got little press. And even when it did, the #1 ranking of the United States was explained away as a statistical mirage.

This is not to say that the U.S. economy is in ship shape. But with all of the talk about China and India dominating our economic futures, it's worth reminding ourselves where these new economic challengers stand in comparison to the United States today. Despite the high economic growth rates of developing nations, the United States is by far the world's wealthiest nation as measured by GDP -- the broadest measure of economic wealth. And the rest of the world isn't even close. This year, U.S. GDP is projected to be $13.22 trillion. That means that the U.S. economy is as large as the next four-largest economies in the world -- Japan, Germany, China, and the United Kingdom -- combined.

The map below -- originally published here -- puts the size of the United States' global rivals in perspective. On the map, the name of each U.S. state is replaced by a country, whose GDP equals approximately that U.S. state's GSP (gross state product.) A quick glance at the map leads to some fascinating -- and unexpected -- comparisons.



Standing alone as a country, California would be the eighth-largest economy in the world and approximately the size of France. Texas' economy is half the size of California's and its GSP compares to that of Canada. Florida's GSP is approximately the size of Asian tiger South Korea. Illinois' economy is approximately the size of Mexico. Ohio's economy is roughly the size of Australia's. Tennessee's GSP is the size of Saudi Arabia; Nevada, the size of Ireland; Alabama's economy is the size of Iran. Bill Clinton's home state of Arkansas, one of the poorest states in the United States, is approximately the size of Pakistan's economy.

And what about the United States' nearest rivals? Germany and China -- #3 and #4 on the list of the world's largest economies -- are smaller than the economies of Texas and California combined. India's $800 billion economy is on par with Florida. Brazil, as we see on the map, is comparable to New York. Russia's economy is about the size of New Jersey (or Texas).

The U.S. Economic Map: Two Caveats

Not surprisingly, reactions to the map have been mixed. The first criticism is that the map is based on nominal GDP -- how much wealth is generated in dollar terms -- and not how many goods and services those dollars buy. Economists sometimes use “purchasing power parity” (PPP) when comparing the size of global economies. Because prices for goods tend to be lower in developing countries, this measure makes poorer countries appear wealthier than they really are. But in taking a birds-eye view of wealth generation in the global economy, that approach makes little sense. Think of PPP as similar to a “cost of living adjustment” on a country level. Within the United States, $50,000 in Kansas buys you a lot more than it does in Manhattan. But as a measure of wealth in absolute terms, having $50,000 in your bank account is the same no matter where you live in Kansas or Calcutta (Kolkata).

Second, the map does not adjust for population. California and Texas have a combined population of 60 million, while China's population is 1.3 billion. This has huge implications. Let's say China does become the largest economy in the world in 20 years time. Yet, because of its large population, even if it continues growing at its current pace (a huge assumption), by 2050 it will only be as wealthy as former Communist Hungary is in 2007.

The U.S. Economic Map: The Past... and The Future

In 1790, the United States was a new, tiny nation of 4 million, about the size of Ireland today. Europe's population was 180 million, while India's was 190 million and China's was 320 million. Only seven cities had a population of 5,000 or more; just 12 had a population above 2,500. The United States had an agricultural economy with practically no factories. By 1885, the United States was #1 in the world in manufacturing. It produced almost 30% of the world's manufactured goods to outpace both the British Empire and the spanking new Germany. Into the 21st century, the cutting edge of global industries -- whether Silicon Valley, Hollywood, or Wall Street -- are still products of the U.S economic experiment.

Underestimating the U.S. economy has become the new global financial sport. Yet the Japanese economy has not matched U.S. growth rates for at least the last decade. Europe celebrates triumphantly when its growth rate hits 2.5%. And for all the press they generate, China and India rank 34th and 48th, respectively in the World Economic Forum's global competitiveness index. The world has been counting out the United States as far as I can remember. The U.S. economic map provides a vivid reminder of just where the U.S. stands.

Nicholas A. Vardy
http://www.theglobalguru.com/article...&offer=GURU001


I thought it was interesting.

[SUBMAN1]

I've been preaching this for ages on this forum, but I still get shot down with people saying CHina or whomever outproduces the US, yadda yadda yadda. ANyway, same story, different day. Just wait a while and someone will tell you that regardless of what you post here or your story, some country is outdoing the US.

-S

[Chock]

But as a measure of wealth in absolute terms, having $50,000 in your bank account is the same no matter where you live in Kansas or Calcutta (Kolkata).

Unless you extrapolate that into a billion, and then take this (possibility) into account, in which case, it isn't:

http://en.wikipedia.org/wiki/Billion

The term billion in the US refers to 'one thousand million', whereas, pretty much everywhere else on the globe, it is taken to mean 'one million million', which is a rather significantly larger figure. Now whether or not that is how the above OP calculations were made, I do not know, but if it was a direct comparison of all the nations own reported figures for their GP, it does mean that there could be a rather obvious thing that has been overlooked by the original calculator of the map if he or she was in the US. Not saying that's the case, but it would not be the first time such a mistake has been made.

Chock

[Letum]

Originally Posted by Chock

Unless you extrapolate that into a billion, and then take this (possibility) into account, in which case, it isn't:

http://en.wikipedia.org/wiki/Billion

The term billion in the US refers to 'one thousand million', whereas, pretty much everywhere else on the globe, it is taken to mean 'one million million', which is a rather significantly larger figure. Now whether or not that is how the above OP calculations were made, I do not know, but if it was a direct comparison of all the nations own reported figures for their GP, it does mean that there could be a rather obvious thing that has been overlooked by the original calculator of the map if he or she was in the US. Not saying that's the case, but it would not be the first time such a mistake has been made.

Chock

Oh! me! me! I'm on the case!

*gets out calculator*


Stand by.............

All added up, the maps is somewhat accurate, the US comes out a little worse than it should.

[SUBMAN1]

Originally Posted by Chock

Unless you extrapolate that into a billion, and then take this (possibility) into account, in which case, it isn't:

http://en.wikipedia.org/wiki/Billion

The term billion in the US refers to 'one thousand million', whereas, pretty much everywhere else on the globe, it is taken to mean 'one million million', which is a rather significantly larger figure. Now whether or not that is how the above OP calculations were made, I do not know, but if it was a direct comparison of all the nations own reported figures for their GP, it does mean that there could be a rather obvious thing that has been overlooked by the original calculator of the map if he or she was in the US. Not saying that's the case, but it would not be the first time such a mistake has been made.

Chock

Any person with half a brain can see that this mistake was not made. Besides, if it were, that would mean the US would have the worlds worst GDP - uhhh hello?

Are you just screwing with us Chock because I wrote that someone would try to say something different? Ha ha. Very funny.

See Camaero! There is a joker in every group! Case proven and closed.

-S

[Subnuts]

Damn.

I knew there was a reason why so many conservatives hate California. It's really France in disguise.

[CCIP]

I laughed at the map at first (come on, it's amuzing to see Uzbekistan THERE), but it actually makes a lot of sense.

I'm surprised by the placement of Russia and Canada, to the latter's credit but with disappointment in former.

[SUBMAN1]

Originally Posted by Subnuts

Damn.

I knew there was a reason why so many conservatives hate California. It's really France in disguise.

Man - you spelled it wrong - Kalifornia! Get it right already.

-S

[nikimcbee]

Originally Posted by Camaero

THE U.S. ECONOMIC MAP VS. THE WORLD

Yesterday, the market capitalization of Chinese state-owned oil company, PetroChina, hit $1 trillion -- eclipsing U.S.-based rival Exxon as the world's most valuable company. Last night, at a lecture in Manhattan, I heard George Soros predict (yet again) that the unraveling of the U.S. economy had finally begun. Last week, a London-based financial newsletter called the United States “the next Argentina” -- suggesting that the U.S. economy's destiny was to echo the fate of Argentina -- a formerly prosperous nation that descended into poverty and economic chaos. It seems that anytime financial markets have a bad week or two, the global financial press readily hitches itself to the doomsday bandwagon by cheerfully predicting the demise of the U.S. economy.

At times like this, it's worth reminding ourselves that we've been here before. In the 1970s, Americans grew up with two myths. First, that the Soviet Union would dominate the U.S. militarily; second, that the Japanese would dominate the U.S. economically. With the Soviet Union erased from the map, and the Japanese stock market below levels it traded at 17 years ago, both fears seem almost quaint. Yet today, the conventional wisdom that Brazil, Russia, India, and China -- the BRIC countries -- are set to dominate the United States is just as prevalent.

The U.S. Economic Map: Size Matters

In the midst of a housing collapse and credit crunch, the impending doom of the U.S. economy is taken as gospel. But look behind the headlines, and the numbers tell a different story. The U.S. economy grew by 3.9% in the credit turmoil-ridden third quarter -- following a 3.1% jump in the second quarter. That means that the United States added the equivalent of a new Saudi Arabia to its economy just since the beginning of April. And the fact that the World Economic Forum ranked the U.S. economy the most competitive economy in the world last week got little press. And even when it did, the #1 ranking of the United States was explained away as a statistical mirage.

This is not to say that the U.S. economy is in ship shape. But with all of the talk about China and India dominating our economic futures, it's worth reminding ourselves where these new economic challengers stand in comparison to the United States today. Despite the high economic growth rates of developing nations, the United States is by far the world's wealthiest nation as measured by GDP -- the broadest measure of economic wealth. And the rest of the world isn't even close. This year, U.S. GDP is projected to be $13.22 trillion. That means that the U.S. economy is as large as the next four-largest economies in the world -- Japan, Germany, China, and the United Kingdom -- combined.

The map below -- originally published here -- puts the size of the United States' global rivals in perspective. On the map, the name of each U.S. state is replaced by a country, whose GDP equals approximately that U.S. state's GSP (gross state product.) A quick glance at the map leads to some fascinating -- and unexpected -- comparisons.



Standing alone as a country, California would be the eighth-largest economy in the world and approximately the size of France. Texas' economy is half the size of California's and its GSP compares to that of Canada. Florida's GSP is approximately the size of Asian tiger South Korea. Illinois' economy is approximately the size of Mexico. Ohio's economy is roughly the size of Australia's. Tennessee's GSP is the size of Saudi Arabia; Nevada, the size of Ireland; Alabama's economy is the size of Iran. Bill Clinton's home state of Arkansas, one of the poorest states in the United States, is approximately the size of Pakistan's economy.

And what about the United States' nearest rivals? Germany and China -- #3 and #4 on the list of the world's largest economies -- are smaller than the economies of Texas and California combined. India's $800 billion economy is on par with Florida. Brazil, as we see on the map, is comparable to New York. Russia's economy is about the size of New Jersey (or Texas).

The U.S. Economic Map: Two Caveats

Not surprisingly, reactions to the map have been mixed. The first criticism is that the map is based on nominal GDP -- how much wealth is generated in dollar terms -- and not how many goods and services those dollars buy. Economists sometimes use “purchasing power parity” (PPP) when comparing the size of global economies. Because prices for goods tend to be lower in developing countries, this measure makes poorer countries appear wealthier than they really are. But in taking a birds-eye view of wealth generation in the global economy, that approach makes little sense. Think of PPP as similar to a “cost of living adjustment” on a country level. Within the United States, $50,000 in Kansas buys you a lot more than it does in Manhattan. But as a measure of wealth in absolute terms, having $50,000 in your bank account is the same no matter where you live in Kansas or Calcutta (Kolkata).

Second, the map does not adjust for population. California and Texas have a combined population of 60 million, while China's population is 1.3 billion. This has huge implications. Let's say China does become the largest economy in the world in 20 years time. Yet, because of its large population, even if it continues growing at its current pace (a huge assumption), by 2050 it will only be as wealthy as former Communist Hungary is in 2007.

The U.S. Economic Map: The Past... and The Future

In 1790, the United States was a new, tiny nation of 4 million, about the size of Ireland today. Europe's population was 180 million, while India's was 190 million and China's was 320 million. Only seven cities had a population of 5,000 or more; just 12 had a population above 2,500. The United States had an agricultural economy with practically no factories. By 1885, the United States was #1 in the world in manufacturing. It produced almost 30% of the world's manufactured goods to outpace both the British Empire and the spanking new Germany. Into the 21st century, the cutting edge of global industries -- whether Silicon Valley, Hollywood, or Wall Street -- are still products of the U.S economic experiment.

Underestimating the U.S. economy has become the new global financial sport. Yet the Japanese economy has not matched U.S. growth rates for at least the last decade. Europe celebrates triumphantly when its growth rate hits 2.5%. And for all the press they generate, China and India rank 34th and 48th, respectively in the World Economic Forum's global competitiveness index. The world has been counting out the United States as far as I can remember. The U.S. economic map provides a vivid reminder of just where the U.S. stands.

Nicholas A. Vardy
http://www.theglobalguru.com/article...&offer=GURU001


I thought it was interesting.

Great post, I love geography