The Washington Post reports that the U.S. economy has recorded explosive growth this quarter, up more than double from the last quarter.
As the Post reports, in the first quarter of 2006, U.S. economic growth was 4.8%, while in the last quarter of 2005 it was only 1.7%.
Now a rather ignorant person might say that Russia has more impressive ecnomic growth than America does, since Russia’s rate of growth in the past few years has been between 5% and 8%.
What that person would be overlooking is the economic base of the two countries. The Russian economy is worth $1.5 trillion at most (that’s only if you inflate it using phony “purchasing power” numbers) while the U.S. economy is worth at least $12 trillion.
That means that when the Russian economy posts 8% growth it is only worth $120 billion.
However, when the American economy post 4% growth, it is worth $480 billion.
In other words, half as much economic growth in America is worth four times as much money.
Now, to be sure, America has twice as many people as Russia has. So when Americans carve up their growth, each person would not get four times as much as a Russian, but rather only twice as much.
In other words, with 4% growth each American gets $1,600 while with 8% growth each Russian gets only $800. And it’s only $800 for a Russian if you believe that $800 buys the same quality medical care in Russia or in America, or the same quality of whatever product you want to buy with it. If you think Russian-made products are often of lower quality than their American counterparts (think of comparing a Lada with Taurus), then the $800 must be reduced to an even smaller figure, maybe as small as $400.
And then of course there’s the famous fact that Russia doesn’t have a middle class. In other words, Russia never comes remotely close to equally dividing national wealth, so some Russians will get $1 million when the economy grows and most will get $0. In America, the middle class is much more viable and shares a much bigger slice of economic growth.
In other words, with 4.8% growth America is blowing Russia right out of the water.