“Europe’s ‘Reason for Being’ at Risk as Competitiveness Wanes, Report Warns” (New York Times, 9/9/2024):
Europe must increase public investment by nearly $900 billion a year in sectors like technology and defense, according to a long-awaited report published Monday in response to growing anxieties about the continent’s economy lagging behind that of the United States and China.
Mr. Draghi said that the European Union needed additional annual investment of up to 800 billion euros ($884 billion) to meet the objectives he laid out in his report. That is equivalent to about 4.5 percent of the European Union’s gross domestic product last year. By comparison, investment under the Marshall Plan from 1948 to 1951 was equivalent to about 1.5 percent of Europe’s economic output.
Conditions that contributed to the continent’s prosperity have changed substantially since the coronavirus pandemic and Russia’s invasion of Ukraine. Cheap Russian gas is no longer available, and energy prices have soared. Those prices have come off their peak, but European companies still pay two to three times more for electricity than U.S. companies, the report found.
We are informed that low-skill migrants make developed countries rich. Europe has welcomed nearly 50 million non-European migrants (source through 2020).
Why does Europe need more government spending, as a percentage of GDP, to become rich if it was already enriched by low-skill migrants?
Related:
- “Our giant welfare state” (Washington Post, 2014), in which we learn that only the French spend a larger percentage of their GDP on government hand-outs
- Heritage Foundation on Germany, finding that it spends 50 percent of GDP on government (higher than the U.S., but the U.S. percentage is distorted because we don’t include nominally “private” spending on health care (which is so regulated and mandated by the government that I think it should be included))
- Heritage on France (60 percent of GDP spent by the government)
- Heritage on Poland (45 percent of GDP spent by the government)
- Heritage on Taiwan (18 percent of GDP spent by the government (and 82 percent by TSMC?))
- Heritage on South Korea (26 percent of GDP spent by the government)
Sometimes monetary policy & fiscal stimulus aren’t enough to do the job. Historically, most immigrants were brought in as slaves. They still mostly are in Calif*, paying off mortgages in devalued money. The slaves just need put out more instead of writing blog comments.
“paying off mortgages in devalued money.” – this is actually a great thing about ownership of real assets. you really do not want to pay off mortgage in strengthened money. No reason to pay off mortgage earlier. My mortgage now, after 20 years is 1/4 of monthly lease for similar house.
A day or two of my earnings, and I am being paid below average rate, partly because I do not care to look for a better job due to relatively low housing expenditure.
USA GDP per capita is now fully 2x that of Europe. This is kinda nuts.