True but notably Asian Americans have a longer life expectancy than Japan. As a subgroup, Asian-Americans would be 3rd highest in the world. Hispanic Americans were about 81.3 which is not too far off Germany and the UK. There are 68 million Hispanic Americans, which is about equivalent to the UK.
I take your point, but I think this gap will continue to shrink in the coming years as overdose deaths decline.
1. The US is significantly more diverse than European individual nations (not Europe as a whole). Different populations have different crime rates and even control for factors such as income and education crime rates are still higher. Europe is currently experiencing this as it diversifies and seeing an explosion of crime
2. culturally Americans seem to be significantly more high risk high reward and individualistic. That works in some instances(business) but it is disaster in others, particularly around crime
Americans live less than Europeans at every income centile. Yes, the discrepancy is lower at the very top, but violence alone does not explain the difference.
Also, is violence not something that a country as omnipotent as the US claims it is should easily solve? After all, this article tells us how it is superior to Europe in all things that matter and I assume that how long you live tends to be the most important thing for any sane society.
Again, there is so much variation here and when you say Europeans, which Europeans are you talking about?
Places like poland Bulgaria and Romania has about a similar life expectancy than the US. So which Europe?
People say “Europe” as a way to hide their hands
I don’t know if you know this, but countries have different cultures and those cultures lead to different behaviors. America has always been a significantly more violent place than Europe (it makes sense, considering the self-selection of people who immigrate to the US). And we have a lot of guns.
Whoever said America’s omnipotent? lol
The article does not make the claim that America is superior than Europe. In fact, they explicitly say there are some significant deficits. But they make specific claims about economic stagnation between Europe and America. And again none of this is new! The EU says it itself! European leader say it! I don’t understand what’s this big coping thing you’re doing lol
The data I mention in all my posts refer to EU average (or EEA where there are no EU-wide statistics).
The article clearly states that some second-tier cities from the US are somehow superior to their EU equivalents (or even top tier EU cities), which is absolute nonsense if you look at most quality of life indicators or actually use a proper GDP/capita PPP comparison (and it's not at constant prices). That's why Europeans (like myself) feel the need to respond - because the comparisons are outrageous.
As to why EU leaders are so critical - that's because our culture is completely different. Although EU is made of 27 countries and probably even more cultures, on average we tend to be significantly more critical of ourselves and others, while the US tends to be extremely positive.
That doesn't mean that the competitivity deterioration conversations in Europe are not justified, just that we are more vocal about risks. Meanwhile, the conversation in the US is mostly positive even for topics that we in Europe would consider dramatic - rule of law, public finances, lack of competitiveness in several large industries where the US used to be relevant, etc.
That's an uncharitable reading of the data and I think you should reflect why your mind went there first. Another reading and my intention is that some communities have figured out how to have European/Asian life expectancies in America and perhaps the rest of the country could learn from them. Asian-Americans have the highest income of any racial group, which might tempt folks to write this off as simply a money issue.
However, that is not the case of Hispanic communities, which are poorer on average than white communities. It is ok to read other intentions into writing than assume the worst of someone, but I am on the internet after all.
Americans have much, much better healthcare and healthcare access than most European countries. This is another area of frequent and egregious misinformation. What you get in some countries, like the UK, is markedly worse than even our public system (providers that accept Medicaid) in the main.
And also pay more per capita for that health care and yet don't live as long and are sick for longer. And this is *before* Medicaid cuts. Re access, many people in US rural areas are losing access altogether as hospitals close. So... "better healthcare" and "better access" depend a lot on how you define "better" and "access".
Quality of a health care system isn't all that strongly correlated to life expectancy or other health outcomes. The most important factor in health outcomes is lifestyle choices. And the median American makes much worse lifestyle choices than most developed countries.
Of course we pay more for healthcare, we have better healthcare and more money. Healthcare isn’t free, you know. And yeah, it’s difficult to provide healthcare in an enormous country with many very remote communities. I can guarantee you there isn’t a place with a population distribution like ours that is providing better access to healthcare. The fact that you can be airlifted from my tiny remote town to a world beating hospital and be in surgery in under 2 hours is nothing short of a miracle.
No, we (Americans) are paying more for healthcare because we are buying *more expensive healthcare*. Preventative healthcare is less expensive than diagnostic / responsive / restorative healthcare. Americans have more health *problems* (worse outcomes) and then buy more expensive healthcare *solutions* to remediate that. Combined with worse healthful living choices (diet, exercise) and we just spend more on healthcare while still having worse outcomes because we are having to buy the expensive stuff to address our myriad problems.
You can't possibly claim nonsense like this when the US has mediocre outcomes in healthcare compared to all other developed nations, with just a few bright spots like oncology.
It's really incredible how Americans look at the output of a system that is objectively one of the most inefficient and ineffective in the developed world and then claim that it's actually far ahead. This sort of reality distortion and exceptionalism make any rational debate impossible.
If you want to see just how detached from reality your claims are, perhaps look at how well your system performed during COVID: you managed to have double the death rate of Europe despite having a one month advantage to prepare (or about 4 times worse per capita if you compare the performance from the moment COVID started to accelrate in the US). The US system performed worse than even Eastern Europe on aggregate, just as it does when it comes to child mortality or mortality from other causes preventable through good healthcare policies.
PS: please allow me to laugh at the airlift miracle specific to the US. We have had that in Romania for over 15 years and we're one of the poorest countries in Europe.
I agree with all of this. It's also true that the US market has very literally subsidized pharmaceuticals research and development for the rest of the world for decades. A lot of that has focused on "elective" treatments or rent-seeking (eg viagra and endless patent extensions on SSRIs), but this is the same R&D industry that also got a working COVID vaccine in under 12 months based on decades of government-funded research.
Again, it seems like you're arguing against a straw man version of better. The US has higher infant mortality, material mortality, higher diabetes rates and lower lifespan that the EU. And outcomes for Black and Hispanic residents fall far below the median. US health care is tied to employers, and medical bankruptcy rates (66%) are THREE TIMES higher than the next highest country. I'm confused what's "better" about that. Better than the 1700s? Sure. Better if you're wealthy? Yep. I'll agree with that.
The only one misinforming people is you. Our version of healthcare is laughable with its high cost due to its for profit nature, low access because of those cost, worse outcomes (health wise and bankruptcy wise). The only area it outshines the rest of the developed world is in health outcomes for the super rich.
How could you write this without throwing up in your mouth?
If they’re rich. Not on average and definitely not as a return for investment. Valet parking doesn’t save anyone’s life either, which is why European hospitals don’t have it.
See also: food. My EU friends in the US bemoan the terrible state of our food options. At the population level, we *know* that diets high in refined foods and low in fresh vegetables lead to long term health problems and lower quality of life. Diabetes rates, for example, are 50-100% higher in the U.S. than most E& countries (ref: https://ourworldindata.org/grapher/diabetes-prevalence?tab=table)
The UN has consistently ranked the US top 5 in food quality and safety (funnily enough the US has stricter food label laws). It’s just Americans eat significantly more and chose way worse foods
At the end of the day, US businesses have strong lobbying and face comparatively weak regulation.
Case in point: glyphosate is commonly used as a preharvest dessicant in the US, so it's commonly found at low levels in non-organic grains. This use is not allowed in the EU. And a range of pesticides are approved for use in US that are banned in the EU and China.
“It’s appalling the U.S. lags so far behind these major agricultural powers in banning harmful pesticides,” said Nathan Donley, a senior scientist with the Center for Biological Diversity and author of the study. "
This is funny because European farmers have been protesting for a rollback of some these bans on pesticide and Europe has a pretty strong farmer lobby, where they literally will show up to capitals and those manure at politicians
In the US, farmers get direct payments from the government on top of a range of subsidies, predominantly for corn and soy. And while US farmers are very politically engaged, its really the agribusiness corporations that have captured the regulatory system here.
As they do in the EU. The EU budget was almost derailed because the EU was trying to lessen farmer subsidies; and the Mercusor trade deal might not pass the EU parliament because of farmers.
Farmers, particularly polish farmers are going to be a real sticking point for Ukraine accession into the block
It is true that agri-business lobbies really hard, but they almost never pull the stunts European farmers do (often for terrible reasons) and it’s a lot easier for the US government to overrule them (due to the nature of the political dynamics in the US vs EU, perceived value by the public and the difference between a unified federal government vs whatever the EU is.)
One example is that the US agribusiness *hate* the current tarrifs and immigration crackdown with a burning passion but everyone just ignores them lol
I mean they’re different regulatory regime. Europe is significantly more cautious and has a do no harm or approach while the US has a more prove that there’s harm approach.
Yeah, I mean it’s really just Americans eat almost 1000 calories more a day than Europeans, walk half as much, drive twice as much, eat out significantly more, and has giant portion size.
I can easily get fresh produce or bread that rivals that in any of Europe (I still haven’t taste any fruit that’s better than California’s and San Francisco weirdly has a ton of French bakeries filled with French people lol). But Americans like their junk food and McDonald’s. 🤷🏾♂️
I am Canadian so fresh produce is more seasonal compared to somewhere like Cali. But I live in Europe. I find that you can find top end food basically anywhere, and in Anglo countries we do better at importing other cultures whereas France or Italy only do a few foreign cuisines well.
But ON AVERAGE and per price, the food in Europe is more likely to be high quality and well prepared, whereas we have more crap in NA. You see too (like we already said) that the share of highly processed food being consumed is much higher in the U.S.
It does look like choice more than availability drives the difference, but I enjoy benefitting from the overall expectation of high quality in Europe even if things like good Mexican or Thai food are harder to come by.
The thing is, European spend almost double of their income on groceries than Americans do (they also spend more than Canada which I found interesting).
Now, as far as eating out and junk food, you’re right America’s really do love shit food there’s no way around that 😭 looking at the share of Americans that eat fast food compared to Europe is actually insane
Where do your EU friends live? As a native Bostonian resident in Vienna, Austria, I would not say that food options are significantly better in Vienna than Boston. Boston offers better produce and much better sea food options. Vienna has better dairy and cheese. Better bread in Vienna in general but Boston does have excellent bakeries if you know where to look. Restaurants are arguably better on average in Vienna (especially Italian) but not dramatically so.
Yes, food quality varies considerably within the US, and comparing Vienna to Boston isn't really a good "median to median" comparison. Produce in CA is generally great (and very regional). Good bread is hard to find most places. A lot of recent growth in US farmers markets and farm-to-table operations. But from packaged food to restaurants, the food options at most interstate exits and suburban strip malls are low in fiber, high glycemic index, and highly refined.
Yes. Using two super-star food cities as representative of their broader populations is misleading. Food options in US metro areas are much better than what the average resident has access to, and Boston is better than the average US city. I'm guessing a similar pattern applies in the EU, but I know less about the urban/suburban/rural stratification there.
Nordic Americans live just as long as Nordics in Europe. In all likelihood, the same is true of German Americans, French Americans, Italian Americans, etc. The longest lived people on Earth are the Japanese. Japanese Americans live longer.
Sure, if you want to focus narrowly on the healthcare systems. The problem is that the data consistently show that healthcare outcomes overall are poorer here. It’s an “issue” that most Americans are covered by employer insurance, because unlike countries with universal health insurance (essentially all other developed countries), a lot of Americans can’t get health care at all, high-quality or otherwise. If stagnation means universal access to affordable health care, I’ll take stagnation.
This is not to say that Europe doesn’t have some particular economic issues, and in fact, it may be a good thing for Europe that the US is no longer a reliable partner so that they’ll get motivated to deal with them. This is not a good thing for the US, or the rest of the world, however.
If universal healthcare is really as good as proponents preach (lower cost, better outcome), enacting it in the U.S. would stir more economic growth and Americans will have as good healthcare as Europeans at the cost of *even* higher wages. So Europe must be doing something double wrong to deserve stagnation.
But the point here is that Europe really isn't as badly off as the stagnation pessimists believe. High health care costs *are* a drag on the economy and personal finances and well-being. European systems deliver high-quality health care at a lower cost, meaning Europeans don't have to worry about being one serious illness away from bankruptcy.
I haven't the faintest idea what this means. How does anyone know for sure what will happen in the future? I don't see how universal health care will result in the deaths of millions. We're consigning tens of thousands to poor health and early death now.
I very much appreciate the focus on data and facts about Europe’s economic stagnation, rather than rhetoric about how things that are often not even relevant for the economic comparison are supposedly worse in the US, as a form of 'Eurocope'. If Europe wants to improve, we first need an honest understanding of the underlying facts and problems
We also need to understand the drawbacks of a certain socio-political model. Otherwise it is just the typical one sided promotion of a right-wing agenda. All of this has been a trope ever since the 1990s, if not longer (in the 1970s: JJ Servan-Schreiber, Le Defi Americain), often with as goals to push through aims that they tend to call deregulation, flexibilisation and liberalisation.
* One big source of EU regulation is the business lobby itself, and especially the push for harmonization and standardisation (this cuts out the protectionist ploys by national governments and power bases).
Yeah, it's not clear whether the US software industry (social media addiction/division/etc.) is actually beneficial. Unfortunately, Europe pays the costs even if it doesn't develop the software itself. And AI development could be far worse than anything we've seen so far with social media: https://www.youtube.com/watch?v=7wy3xyoXYt8
Side note, the article mentions that the median Meta employee earned $388,000 in 2025. I believe Meta is known to pay more than other tech companies because many people have ethical issues with working there. And of course Meta is a participant in the AI suicide race. I give European protesters a lot of credit for working to stop the sale of chips to irresponsible AI firms: https://pauseai.info/amsterdam-protest-2025-december
Just for starters, the WHO healthcare “ranking” includes a 1/3 segment on the opinion of WHO staffers.
And look, wouldn’t you know, a plurality of them are Europeans. Who could have guessed?
Around half of the statistics have similar issues. Like, for example, that the “World Happiness Report” doesn’t measure happiness. It measures “satisfaction.” When you ask people about happiness, neither Europe nor America are particularly happy. Who are the real happiest people on Earth?: Latin Americans.
Or take “social mobility.” If you have an artificially compressed income range, then it’s pretty easy to climb that income range. After all, it’s just a few grand. That’s typically called *relative social mobility*. But when it comes to *absolute social mobility*—i.e. the ability of people to out-earn their parents measured in dollars, not percentiles, America ranks quite highly.
But cherry-picking of data aside, the the entire bottom half suggesting is pure, unadulterated bullshit. As would be obvious to anyone with a smidgen of self-awareness.
You are the one cherry picking and using ridiculous explanations like the WHO being biased.
Let's exclude the subjective charts, like happiness index or satisfaction with life (where actually European countries takes the top spots) and even mobility. All the others are objective measurements and reflect reality.
Oh man, appearing sophisticated by dazzling one’s audience with jargon has nothing to do with facts. You can find endless superficially impressive scientific prose in any half-intelligent climate denier or anti-vaxxer as well. Garicano is in fact loose & misleading with his measures here. Europeans should be alert to losing the unique value we offer in the global economy by Americanizing ourselves, making ourselves a second-rate dependency on a declining hegemon à la Latin America. Beware the Chicago boys!
This article is exactly the kind of trigger we needed.
Over on r/EU_Economics, which is now the 5th largest economics-related subreddit, we’ve started a slightly ridiculous but hopefully useful six-month social experiment: building an open-source economic theory for Europe, with the community contributing, criticising, refining, and being credited.
The working title is:
The EU Economics Open Source Collaborative Baseline Growth Theory
The basic idea is simple: Europe’s debate is too often framed as growth versus welfare. I think that is the wrong frame.
A strong social baseline may be what allows societies to tolerate disruption, reform, competition, failure, and renewal. But if growth disappears, that baseline eventually becomes unaffordable.
So the tension is:
Growth pressure without baseline resilience creates rupture risk.
Baseline protection without growth renewal creates fiscal decay.
If anyone here enjoys economic argument, data, European policy, institutional theory, or simply telling people on the internet why their model is wrong, please come contribute.
The opening sentence of last paragraph falls under the rule "show, don't tell."
I find Krugman's view refreshingly balanced, he's willing to acknowledge that Europe does objectively better on some metrics while lagging on others.
The US outperforms Europe in software, but can't seem to build a railway or a ship without it turning into a budget disaster. What's better or worse depends on whether you prefer a B2B SaaS platform or a train platform.
Of course the UK can accomplish neither, which makes me suspect these jeremiads about "Europe" are actually mostly about the UK.
You're perspective is imo 25 years or so out of date, at least in germany. Germany is mostly running on old train stations, all the new ones are disasters. In fact, all public infrastructure here is increasingly like this; Old infrastructure deteriorates but at least works without massive investments, new infrastructure are complete clusterfucks, budget disasters at best and just plain not working at worst.
As much as I hate to temper German self-flagellation, a look at the NYU Transit Cost Project database shows that terrible failures by German standards measure as fairly standard overruns by American ones. That's not to say that Germany doesn't have room to learn from better performing countries, but things could be much worse.
New York is famous in particular for this, though. Comparing one of the worst-run cities (in terms of public infrastructure) in the US to the average performance in germany is damning with faint praise.
"the NYU Transit Cost Project database" is a database recording transit projects around the world run by the New York University. You can go to https://transitcosts.com/new-data/ and see under heading 4, comparing avg cost/km per country, US is $656M/km at number 7, while Germany is $369M/km at number 25.
France builds still, and Italy actually has good HSR if i remember correctly. Did you se the chart with the cost for nuclear plants? France was an outlier, never having really lost the muscle memory for it.
This a myth that really doesn’t check out; the reality is what can be built is incredibly dependent on where you are in the states. Florida routinely builds trains and infrastructure in under 3 years; Texas is building out solar capacity faster than most nations not named China. Texas and Alabama build housing at pretty rapid clip and have managed to keep housing costs relatively low.
You can see it in the migration data in the states as citizens move to the higher performing states
Trains in NA are ass compared to Europe and that is simply a fact. I know the Florida train and it honestly is good for NA and poor by any competitive international standard.
Yes, because the US prioritize freight rail over passenger rail. The US has one of the densest, most profitable effective and efficient freight rail in the entire world. It has five times more freight rail than Europe, and is second only to the Chinese.
Different countries, prioritize, different things and that’s OK
East Asia is lightening fast I’m sure but there’s a world of difference between Europe and NA. Plus you dont have to build as fast when you already have the infrastructure. What new is there? I routinely take HSR all over France, Switzerland, to London, Italy, Germany… you clear 300km on the reg.
The author makes a really compelling point though that we should try to compare like to like. Comparing Sweden, one of the wealthiest countries in Europe, to Louisiana, one of the poorest states in America doesn’t make any sense.
A better comparison would be where the Swedish settled in America in mass - Minnesota. And that comparison makes it pretty clear that the Swedish and their descendants in America are significantly richer and more productive than the Swedish back in Sweden.
The actual critique of America is pretty straightforward, but often missed because Europeans don’t understand America. the central issue is the wide variability of access to quality services like healthcare or education for the Bottom 20%. If you live in Massachusetts or California, you have basically public healthcare that provides quality rivaling any of that in Europe. But if you live in Texas or Alabama, you will not have that. Most of this is because states choose very different policy outcomes.
So yes, if I was in the bottom 20% I would rather live in Europe. But the top 80% is significantly richer.
A European academic colleague of mine who worked in the US (East Coast) years ago put it pretty succinctly. He said the US is the best place to be rich and the worst place to be poor.
It's cliche to claim the US struggles with poverty relative to Europe. I'm not sure the data really bears it out. Our World in Data says the share living in extreme poverty in the US is 1.1%. That's high by European standards but not terrifically high. Sweden is 0.8%, Spain is 0.8%, Italy is 0.9%
A more inclusive measure of poverty: "Share of population living on less than $30 a day". By this measure, the US looks comparable to Europe. It scores close to Sweden or France, and beats Spain, Portugal, UK, Poland, Italy:
I myself am a long term unemployed Medicaid recipient with chronic illness in the US. I'm not exactly sure what aspect of my life is supposed to be uniquely difficult in the US relative to Europe. I'm reasonably happy with my Medicaid coverage.
Fair point-the comment was from 30 years ago and really spoke to how wealth creation is baked in to being American in a way that is not really replicated in Europe.
It also depends where you are poor; Louisiana vs Massachusetts is very different.
And it also depends on human capital; research has consistently show that poor immigrants do significantly better than the median poor american (or immigrants in Europe for that matter). The hypothesis is that the nature of US immigration selects for high human capital and risk takers, and immigrants tend to cluster in high productive areas
But yes the over all sentiment is directionally correct
It's kind of unfortunate that the Garicanos tend to use "America" as a toto pro pars metonymy of Silicon Valley, because studying what sets American states apart can be very informative.
As an example, in February Pieter wrote in WiP about how hard it is to fire Europeans. If you're interested in increasing employee mobility, it's quite important to know that while all American states except Montana have at-will employment (i.e. you don't need to give a reason for or notice of firing someone), what sets California apart from the others is that it has also long banned non-compete clauses. This facilitated knowledge diffusion, which gave California the edge over Massachusetts, which also had a strong ICT sector in the 1980s.
You can also wonder how much of the superior economic growth (if there is any) is down to the increase in both the public and private debts ever since the Reagan-era (or the expansionist policies in the aftermath of GFC 2008). Current EU is mindful of the public debt positions in an ageing continent, current Trump and GOP is not.
Those debts and trade deficits in turn lean on the privileges the dollar brings and the petrodollar recycling.
“Current EU” hides a bit of misdirection; 2 out of the three largest EU nations, France and Italy, carry quite large public debt burdens, with Germany currently rapidly expanding (as they should for infrastructure but it’s debateble if they are spending wisely).
US household debt is also lower than many EU countries, like France, Sweden or Denmark, and is not that much higher than Germany’s, according to OECD
Corporate financing in the US is also heavily skewed to equity vs Europe; though the one big caveat is private credit
The US' deb/GDP ratio is worse than France's and way, way worse than the EU aggregate.
Although in 2006 (20 years ago), the US had significantly better debt/GDP compared to the EU, the US has issued debt of over 60 percentage points of GDP to support economic growth, while in Europe the increase was of only 15 percentage points. Now it's 40 percentage points higher than the EU and the gap just widens each year.
PS: Germany's debt/GDP is not "currently expanding rapidly", but rather remains at the constant value of ~65%, as it was 20 years ago.
Again aggregated into the EU is a misdirection. Because not all countries are the same and they have radically different baselines and capacities. Europeans always do this thing where they use the EU and Europe interchangeably and they’re very different! The debt burden in the France is fundamentally different than the debt burden of Bulgaria!
Yes, that debt burden of the US is worse than France (but only 10 points) but
1. The US has had the significantly better growth and productivity.
2. The US is the reserve currency.
3. The US debt significantly more sustainable because it has a massive amount of taxing space; the share of taxes that the US takes of the economy is 25%. For France it’s 44%. Raising the taxes to even 2019 levels we basically wipe out the US federal deficit. Further, there’s a built-in stabilization mechanism for pensions in the US where if it’s not resolved by 2032 there will be massive cuts automatically. Try doing that in France.
And we haven’t even talked about Italy lol or the UK (though it’s outside of the EU). It’s not enough to look at debt and just say oh it’s bad. The question is whether it’s sustainable, and the context of the debt. Hell the EU has even admitted itself by commissioning a report by Mario draghi who has said the same things!
Look, you kind of used this card already in 2008 telling us how the debt in Europe in unsustainable and we need to reduce social spending.
Since then, the public finances in US deteriorated significantly, while the situation in EU (on aggregate) looks a lot better without cutting benefits. And please stop using the "EU is a bunch of countries" argument because we have EU wide statistics that provide aggregate (not average) values.
And please be realistic about how difficult it is to reduce the deficit - you're not going to reduce the 120% debt/GDP to EU levels by just increasing taxation and even if it was mathematically easy, there seems to be zero political will and capability to use this lever. Multiple administrations have tried to address this issue and the yearly deficit keeps getting worse and worse.
With regards to stabilizing finances - sure, let's assume the US is capable of doing it although it has tried and failed in the last 20 years and then claim completely nonsensical things like EU countries can't do it although most of them just did and they cut their debt significantly. Singling out France or Italy might make you feel better, but they don't and won't change the EU situation.
Also - the reserve currency argument is irrelevant, you're not comparing the US to Argentina here. We issue all our debt in Euros and can devalue the currency and make the debt load more bearable if needed.
PS: lol @ the Germany argument. Even if the deficit reached 80% by 2029 (it probably won't), we're still talking about a 45 percentage points gap.
PPS: the GDP growth figure is not the positive aspect you think it is in the context of debt. It's actually worse to have high deficits with high growth because it means your spending is completely out of control even in a growing economy. This is why EU countries were able to managed debt better post 2008.
1. It is important to not necessarily use EU-wide statistics because there is no unified fiscal authority over EU countries. Each EU country has their own fiscal and tax policies, including their own social welfare benefits. They
also have their own debt.
The EU is not going to pay pensions or the welfare of each country , or take out debt in the country’s name. That's why it's important to look at each individual nation and not the EU as a whole. Both Obama-Trump and Biden did reduce the deficit. It just so happened that we had a ton of life-changing events that required us to spend a lot of money, like COVID.
Yes, singling out Italy and France is really important because they are the second and third largest economies in the EU. Yes, it is incredibly important to understand France's fiscal position because if they default or have a fiscal crisis, it will spread to the rest of the Euro area.
"The EU handled debt better after 2008." Is an insane statement, considering that in 2013, the Euro debt crisis almost collapsed the entire European Union because debt issues spread from Greece to Italy to Portugal and Ireland. Do Europeans have such short memories?
Germany screwed up building an airport so badly it had to be partially demolished and rebuilt, and Deutsche Bahn dysfunction has reached memetic levels
Thanks, the bs from Krugman & co. in the last few months became ridiculous.
Even worse, the absolute cope of a slice of europeans that think of themselves as being the European elite that just can't accept we're being subclassed by other countries we feel superior of, for some reason. I say "countries" because, for example in tech, the list goes beyond the US: China, South Korea, Taiwan, etc.
p.s. about "Europe has nice city cores but these are inaccessible to young Europeans". European capitals' centres are inaccessible to anyone who's not in the top-10/20% of incomes, and those are the ones tourists typically visit. The normal person in Madrid or Paris absolutely does NOT live in the centre, that is like 5-10% of the population.
You‘re coping the other way just as badly. If you walk around Vienna you will see that most of the central districts are in fact inhabited by young people. Paris and Madrid are not representative. The fact is people who live in Lyons, Wroclaw or Graz arguably enjoy a higher quality of daily life than Americans who live in similar mid size cities. The truth is boring and somewhere between your negativity and Krugman‘s rose colored glasses - Europe is certainly stagnating and falling behind technologically but it is still in many ways a more pleasant place to live than most of the U.S.
I would say you haven't spent much time in Poland lately. Have you been to Wroclaw? I actually lived in Bielsko Biala for two years about 10 years ago, a city of about 170 thousand in Silesia. I rented the first floor of a house on the outskirts of the city. Paid about $500/month, had a small garden, a bakery and grocery store around the corner, running paths and hiking trails behind the house, 5 minute drive to an 18th century downtown with excellent beer halls. Definitely a nicer place to live than Manchester NH, which is a similar size. Even the shopping mall in Bielsko was much nicer.
I've been last year, and while I can't say much about "x square meters cost y euros per month" (because I don't live there), I would define the material standards of living lower than Western Europe for example. It's normal, it was under communism until the 90s, so it's perfectly obvious that the catching-up didn't happen already. Indeed, in a few years the average income could be on par with that of several Western European countries. Surely it was beautiful.
I can say that in my European mid-sized city (with a very old and beautiful centre), 95% of my life, in terms of "how distant are shops/work" is identical to that of a US citizen. I use the car to go everywhere, simply because it's the fastest way to go around, after work I go home, in a home that is much smaller than I could rent/buy with a US salary for an equivalent job, with a much worse car, with worse amenities. It's true that if you go out you can go to beautiful old city centres, but in the end, who cares? Maybe I do that one night a week, and honestly I prefer going to restaurants/bars with other people, it's not that I have a routine of going to the city centre x hours every week.
I would very much prefer a much higher income.
The point is that we don't need to choose, if European economies worked much better we could also have higher incomes, and this stubborn refusal to see what's wrong is maddening.
It's a false dichotomy that we can't have higher salaries and still keep beautiful city centres and stuff like that. Who said that? Replying "but our city centres are more beautiful and blablabla" when someone talks of economics is cope and completely misses the point.
The major problem in European countries like Austria is that taxation is massively skewed to prevent the middle class from building wealth through income, and preserve the privileges of old money. No property tax, no inheritance tax but very high tax burdens on small and medium sized businesses who employ people.
The large car issue works both ways. Driving in the U.S. in a sea of oversized pickup trucks and SUVs is becoming a nightmare. I’m one of those weirdos who has never seen much value in spending a lot of money on a deteriorating asset like a car anyway so I‘m probably not a fair judge.
In many European countries massive taxation starting from middle class incomes is inevitable because, for example, if some states need to spend 400-500 billions per year just for pensions, then there's just no way to reliably generate 400-500 billions of euros every single year, just by taxing the 1k/5k/10k richest persons in the country.
The math just doesn't add up.
And no amount of inheritance tax or property tax will solve this. Property taxes are extremely distorsive if too high, and anyway you can't collect hundreds of billions by taxing 5k super-villas (which will be of course abandoned by riches if you put mega-taxes on them), inheritance suffers from the same problem, and it's easily avoidable.
And just there aren't enough money.
Just try to do the math yourself on taxing the richest people in your country, and calculate the revenue of a huge property or inheritance tax (that anyway will be much lower than that numbers since everyone will try to dodge it). We're light-years away from the numbers needed to pay European states' budgets.
The problem is that we spend waaaaaaaaaay too much and our budgets are simply becoming completely unsustainable from a financial point of view. We like it or not, thankfully it's easy to show, because it's just math.
I, an American, agree with this. As countless recent substack posts have noted, our wealth hasn’t made us happy.
I’m a city person and we’re kind of unusual here but for me the last section is important. It’s already more challenging to do good urbanism here, and poor governance is making it much harder.
Something I've been musing about lately is that "progress" is often antithetical to happiness. E.g. with capitalism, ads tell you "your life sucks, but it could be better with this product". With democracy, politicians tell you "your life sucks, but it could be better if you vote for me". It's probably true that both capitalism and democracy, on average, trend towards making things better (under typical conditions at least--all bets will be off when superintelligent AI eats everything). Yet, comparison is the thief of joy -- constant unfavorable comparisons lead to dissatisfaction. No wonder studies show that gratitude journalling is good for happiness. It helps counteract the ambient tendencies towards unfavorable comparisons.
I don't think people live in the suburbs without a reason in the US. Here too, people who can afford it go to live in single homes as soon as they can. It's a normal preference to go live in peace with much more space if you can afford it, instead of living with other 100 people in a 8 story building.
The reason why there are much less "suburbs" here is that 1) it's much less affordable by the average person, 2) there is much less space to build because European countries are roughly 10x denser than the US (IIRC).
Paris isn’t even representative cuz no tourist even goes where people live. They walk down the Champs Elysee with a bunch of Chinese and Gulf tourists, eat an overpriced meal in arrondissements inhabited by decrepit old octogenarians (7, 8, 16, etc) and think they saw “Paris”.
Das hat ja niemand behauptet. Meine These ist dass, die Mehrheit von den Innenbezirken von jungen Menschen immer noch bewohnt sind. Was man jeden Tag im Karmalitemarkt, in der Gumpendorferstrasse oder im Freihausviertel erleben kann. Wien ist als Studentenstadt ziemlich bekannt.
For neoliberals, the so called Progress Movement, and rightists this is hardly a problem. The city centres being a privilege for the wealthy (stop all rent controls, tear down all public housing, no manipulation of land value) and high levels of segregation is exactly how they like to see this happen and has to be promoted, even.
Rent controls are absolutely a way to worsen home affordability, everywhere, and social housing is just not doable in large swaths of European capitals centres (and even around it).
European capitals are extremely expensive housing-wise, with the centres being comically expensive, but the real problem is that 90% of the city that is not the centre is really expensive, but could be much less expensive by allowing more buildings of any type. And also, the European incomes are just flat or rising painfully slowly, and that is the main problem the article represents.
Cities in Europe have already grown hugely in the past couple decades, and with declining square metres per appartment. As long as there is an excess of money (supply) and a growing wealth gap the housing will become more and more expensive. Billionaires sponsored thinktanks and magazines will not change this.
And yet the housing supply is not enough. Basically the (almost) only reason for housing being too expensive in every city in the world is because the supply can't keep up with demand.
The only BS here is suddenly acknowledging whole cities are (too) expensive, not just the city centres of capitals (which you previously claimed).
Obviously building houses takes time, and there is not infinite land. 'Demand' is a function of the excess of money and wealth in the economy. This is directly absorbed into the prices.
In fact I corrected. The city centres are comically expensive and you can't really do anything about that because they're old and you can't build almost anything there. You can't just demolish the old buildings in the centre or Rome to build 20 story condos.
But outside the city centre you can build much more than today, and there's a metric ton of evidence in the economics literature that the reason housing is becoming less affordable is that demand outruns supply in many cities. I can attest this having seen it with my eyes, where a huge influx of students and young workers hit the city where I studied and you just could see rents increasing by the day. It was like +20/30% in a few years. In the meanwhile a corruption scandal in the city basically halted the construction of almost every residential building.
Of course the price of the 9 square meters room in which students will live is not influenced at all by what homes millionaires choose to live in.
I ask you not to follow lefties on this because it's just a huge bs. The reason for the cost of housing is that regulations don't allow to build enough. Full stop.
The weird thing about the US vs Europe debate is how often it assumes Europe is trying, and failing, to become America.
It is not.
Europe is not anti-capitalist. It is capitalist, but with a different social contract around risk.
Markets exist. Companies compete. People build, sell, export, scale, and get rich. But Europe has chosen to keep more of ordinary life outside the casino: healthcare, education, paid leave, unemployment protection, pensions, consumer rights.
That has costs. Higher taxes. Slower capital formation. Less explosive upside. More regulation. Sometimes too much regulation, because Europe does enjoy turning a simple problem into a committee and a PDF with annexes.
But it is not an accident. It is the deal.
Many Europeans are fine paying higher taxes if healthcare is not tied to your employer, university is not a lifetime debt sentence, and losing your job does not immediately turn life into a cliff edge.
So yes, Europe has a growth problem. That is real.
But Europe is not a failed America.
It is a different version of capitalism, asking a different question:
how much of ordinary life should be exposed to market risk?
Of course, but this is actually the crux of the issue - the natural aversion to risk. Tesla, for example, could have never come out of Bavaria with billions of Euros invested into a bold high risk venture. But perhaps there needs to be less aversion to compete globally in 2026.
Mistral, Airbus, Arianespace and hundreds of high risk European ventures with billions in funding don't exist then.
There is a clear difference in risk tolerance between the US and EU, but that doesn't mean that blitzscaling companies that burn obscene amounts (usually to squeeze others out of the market) should be the model we emulate. In certain cases it is beneficial, but oftentimes it is far from it.
Thank you for posting this. People always compare SF to Denmark when a more accurate comparison is the outskirts of Lyons to the suburbs of Philadelphia. Italy (60 million people) felt very poor to me relative to America. Milan had very few new cars or housing and despite it's reputation for fashion many townfolk were wearing worn out used clothes. Overall Italy felt much closer to Malaysia than germany. Northern Germany is not exactly booming and the UK outside of London is falling far behind. I am not sure if AI is the correct goal here. The rise of Asia (first china and now India) is threatening the traditional lead in manufacturing so Europe needs to become more competitive in its core competency.
"Italy (60 million people) felt very poor to me relative to America. Milan had very few new cars or housing ".
This is very interesting because it's something similar to what I've noticed (and I always tell this when I talk about the trip), but in reverse. I've been in the US last year, it looked like everyone had the last Tesla Model 3/Y model. If I had to guess, maybe in Milan you see a Model 3 out of every 20-40 cars in the streets (various model years from 2017 to 2025). In the US (CA) I've seen a giant flood of last-year Model 3/Y everywhere, and many were not base models. Never seen so many Teslas in one place.
In general it looked like the average car was a 50-60k car, here is more a 20-25k car.
You can definitely claim some areas of Italy are poorer than the average US city, but picking Milan out of all possible cities is just nonsensical.
I personally dislike Milan, but it is extremely rich and the quality if life is comparable to top US cities and we're not even including its beautiful surroundings in the equation. I'll also challenge the used clothes claim - even if you dislike like their fashion preferences (I do), people are generally very well dressed (as in comparable to the richest areas in the US) and you rarely see worn out clothes.
There are other cities in the EU where people dress poorly, I'm sure. Milan is not one of them unless you equate poorly with kitsch (which is subjective).
Hello seek. My claim about Milan is most of the wealth is tied up in foreign money (Russian, British, and french) and not really spreading to the locals. If you were to talk up to a well dressed person in Milan (and I agree there are many) you will inevitably find out that they are not local milanese and often not Italian at all. The comments about the clothes were the taxi drivers, school teachers, or nurses (our daughter got a bit sick towards the end of the trip). The level of income for these individuals seems to be at 30%-40% of their American counterparts. An experienced nurse in nyc (probably most comparable to Milan) is going to avg 100k per year in income. The ones we met in Milan were just not even close in comparison.
I'm sorry, but most of these claims are just not even close to being factually correct. And that's because you chose one of the wealthiest and most successful cities in Europe and decided to somehow make it look poor even though no statistic supports it. At least choose something like Bari and then try to artificially extrapolate, it's more credible.
Now for the counterarguments:
- The median salary in Milan is about 55-60% of the median salary of New York (including for nurses, where the ratio is more like 60-65%) and higher than multiple large US cities. However, cost of living is significantly less than half for rent, transportation, education and healthcare, so unfortunately even the richest US cities have a hard time offering a similar quality of life even though a few have significantly higher average salaries in absolute terms.
- Milan has one of the highest densities of rich people in the world, significant higher than New York or any large US city. Only a few are foreign born. If you index by cost of living, then it gets even better for Milan.
- I visited Milan multiple times and never have I seen a taxi driver that is poorly dressed. Also, it's a funny argument coming from the US, where taxi and even Uber drivers basically dress like in Eastern Europe and you rarely see them wearing a shirt (a common occurrence in any large Western European city)
I really don't like Milan,.but they are definitely not poor or worse off even when compared to the richest US cities. And these are facts, not subjective observations.
I like krugman but this is a good counter to what is often a bit of a bias he has towards Europe. I do sometimes suspect that if the USA had not elected Trump people in general could feel better about the progress of the US. I have visited many times and spent 6 great weeks working in Philadelphia in 85 when I was 25. But now just feel let down and disappointed. Bit like a close family friend we don’t like to talk about much or visit anymore and while they have a better car and bigger house we need find a reason to doubt their wealth is wither well earned or deserved.
As an American, I think the possibility that US wealth is not well-earned is worth discussing.
We're known for software, but has US software really made the world a better place? Instagram is giving you body dysmorphia, X is creating social divisions, reddit is relieving you of your ability to think independently, youtube addiction is removing your ability to socialize, etc.
America being richer than Europe is the whole point. Of course America is filthy rich. The US produces more fossil fuels than any other nation. It has the second most farmland after India, and you can't grow nearly as much in India. And then it has every other kind of natural resource, amazing natural beauty that drives tourism, two perfect coastlines that never freeze, and oh yeah - being two huge oceans away from any country that might be a threat. America is the country that got all the powerups before the game even started.
And yet, European tourists feel like it's a third world country when they walk around due to all the homelessness and run down areas. And we have a third world life expectancy too, coming in just above Cuba and just below countries we like to make fun of like Albania. We're the rare country where a cancer diagnosis can send you from middle class to bankruptcy. Where people work plantation hours just to get by.
That's the point. We are, by every objective measure, super rich as a country. But only the top 0.1% can tell. That's a massive failure of our society.
(1) Paul Krugman reminds us of those scholars who claimed the Soviet Union was doing great and about to catch up with the US. It wasn’t, and it didn’t. It collapsed. (I am sorry if this reads like Schopenhauerian eristic, which is not my intention.)
(2) Now the numbers: Europe vs the US on forward P/E: (source: the US-made ChatGPT)
The “Soviet statistical lie” was a stable Cold War equilibrium under asymmetric information.
(1) The Soviet statistics were one big Patemkin-village as the Soviets had both strategic incentives to lie to the West (they couldn't possibly lie to their own public, given that the empty shelves were at full display in their shops).
(2) They also knew the US would optimally pretend to believe these lies (see below).
(3) The “catching up” lie was deliberately taken at face value by the US government to justify the Vietnam War, the huge defense budget, etc.
(4) Of course, the US government was fully aware of the Soviet lies - as well as the incentives behind them - the empty shelves were perfectly observable by the embassy staff, plus the US had spies inside the Soviet Union. After all, it was advised by top game theorists, including Schelling, Shapley, Intriligator, and others.
(5) But the US government also knew - just like the Soviets knew that it knew, etc. (in a common knowledge equilibrium) - that verification of these lies was extremely costly for the US public.
(6) Acting in its own self-interest, the US government optimally chose to accept the Soviet statistics at face value.
(7) Which created a stable “Soviet statistical lie” equilibrium until
(8) In 1990, the truth came out, and it became crystal clear - through a very easy backward extrapolation - that, e.g., in 1970, the Soviets could not have been such an economic powerhouse as - at the time - they claimed they were.
The idea that all Soviet progress was fake is itself a fake story. While in the public imagination in the West the fall of the Soviet Union is seen solely evidence of how a socialist planned economy does not work ever, the reality is that it very much did work to improve living standards for several decades before hitting an oil crisis due to global factors in the 1970s which upset the foundation of both its economy and also its foreign policy.
It's a resource curse story more than a socialism vs capitalism one, but that story is less politically useful.
Actually, I implicitly claim quite the opposite: they were smart. They enabled an equilibrium with the Russian Potemkin-village economy under common knowledge, with the clear benefits for the West and costs for Russia. Of course, I mean, common knowledge, excluding the Western public. It is clear that public support was necessary for the arms race to continue or intensify (under President Reagan). The part that I have difficulty explaining is why the Russians, who knew all too well the true Potemkin state of their own village, did not connect four dots: (1) that fake village, (2) the common knowledge about (1), with the above qualification, (3) the arms race, and (4) the acceleration of their and the Soviet bloc's collapse.
The US is undoubtedly an economic superpower with a political economy that drives growth. In terms of wealth and production, they are miles ahead of Europe and pretty much everyone else.
How much of that is due to historical, structural and geopolitical factors is a matter of debate. After all, they were the only industrialized country not absolutely devastated by the Second World War. Their fantastical military presence all over the globe and extremely aggressive foreign policy over the past eighty years has ensured that they are (almost) always in the position of ensuring their own interests. Immigration and a younger population is another major factor, as is the dollar's dominance and capital accumulation.
All that being said, many European countries could certainly learn something from US policy. I don't think anyone is arguing against the American ability to innovate. Of course, it's a bit misleading to draw comparisons between the US and some monolithic "Europe" that doesn't really exist. Different European countries practice very varied economic policy. Perhaps more comparisons should be drawn between US states and single European countries? Also, the UK is somewhat in it's own league nowadays (with Brexit and due to other factors), and its presence in these US-EU comparisons always muddles the picture a bit.
Nonetheless, us Europeans should probably ask ourselves what we could do like the Americans to drive growth on the Old Continent. However, the US should absolutely also ask themselves what they could do like the Europeans to drive up their quality of life.
At the end of the day, it's more interesting to wonder why the world's greatest economy is not producing better results on some key measurements on living a good life, such as:
-life expectancy
-infant mortality
-treatment of illness
-prevalence of preventable deaths
-literacy
-prevalence of drug addiction
-crime
-violent crime
-homicides
-imprisoned population
-experience of happiness
Taking into account the difficulty of forming a coherent picture of Europe as a whole, it can be said with some certainty that despite its economic stagnation, Europe outshines the US handily in all of these measurements. Whether that is despite or because of the differences between the political economic models in these places is hard to say. In any case, they should spark some questions in the US, as much as measurements of production and wealth should spark questions in Europe.
Thanks for the comment, and agreed that "Europe" hides a lot of differences inside. May post last week (which may have spaked in part the conversation) was titled Two Europes: https://www.siliconcontinent.com/p/the-two-europes precesily on that. Also e.g. on Sweden's lessons for innovation and start ups: https://www.siliconcontinent.com/p/why-sweden-has-so-many-unicorns. And yes, there are many things where the US is doing the wrong policy (e.g. gun laws) where there are no growth tradeoffs. So indeed a lot to think about from the US side. My view is that, from our side, we can learn a lot of the US without acquiring all the "vices" you list.
Quality of life and standard of living are two different things. And to the point others have made about regional differences: if you've ever flown from Munich to JFK or Newark and then taken the NJ Transit train into NYC it feels like you've gone from the first world into the second. One data point, I know, but it never fails to feel shocking.
Yes, of course, but a tired cliche. Most people prefer a cafe with a pleasant view in an Italian piazza. It's always been the comparison for centuries.
No, it's not a cliche, it's what happens when you travel there. America's infrastructure in many of it's flagship cities is a mess. And I'm not talking about enjoying an espresso on a piazza, I'm talking about being able to take public transportation with my third grader and not having to step over a drug addict covered in vomit, or sit in a diner without having some dude wander in with an exposed machete hanging out of his back pack, or having to set aside 70-90% of my salary for day care, private school and 529 college savings plans. In the end, this is about the values one holds, so it's subjective. I'm American and you couldn't pay me to go back, but I know many Germans that won't ever stop complaining about Germany and think the US is the land of opportunity; a shining city on a hill. There is no 'right' answer.
No, it's a tired cliche Eleanor. Read Hemingway or Twain, or countless others on their time in Europe. The exact specifics may may be different, but the overall sentiment is the same, it's more pleasant. Amazing. It's simply not a original observation by a long shot.
My goal here, 'Alfred', wasn't to be original, this was your assertion, not mine. It was to make the point which I closed on; that these are values based decisions based on more than simple pleasantries. I've based important life decisions on it, like whether or not I want my child to have to go through active shooter drills at school. I've also heard it from more and more Americans and reasons are things like 'I can't afford to live in the US anymore', or an ex-colleague telling me at her consulting firm she was surprised by how, without missing a beat, people had a 'Plan B' for moving after the election. But don't take my word for it:
"The entry-level Deloitte consultant job in Madrid pays around €28,000, roughly $33,000 per year, according to Glassdoor. In Charlotte, the largest city in North Carolina, the entry-level Deloitte job pays $63,000."
Ok. But then how much is the cost of health insurance and schooling for the North Carolina worker?
It depends a lot on the employer. Much tougher for small businesses to provide good insurance. Insurance out of pocket is very expensive without government subsidies which some of those expired recently and weren't renewed
It's not just health insurance, it's differences in cost of living + health + college saving + pension saving + transportation + paid holidays + maternity leave (for women) + daycare + others.
You can definitely earn more in the US and if you're very frugal you might save a bit more, but the disposable income is significantly higher only in certain circumstances and especially if you're an immigrant and don't plan on having kids or retiring in the US.
Garicano is right on measurement. Krugman is right on experience. The productive output gap is real and wider than current-price PPP suggests because falling tech prices mask rising tech volume. But European life expectancy exceeds Americas by 3-5 years, healthcare costs half as much with comparable outcomes, and traffic deaths run at a third the US rate. The country producing more isnt necessarily the country living better.
The genuine question is wether the productivity gap eventually becomes a welfare gap. Krugmans model says no because tech gains flow through trade at world prices. Garicano says yes because the producing country compounds advantages in investment, wages, and talent over time. The answer depends almost entirely on trade policy. Under free trade, Krugman wins. Under the tariff and export control regime thats actually emerging, Garicano wins. AI concentrated in US firms accelerates whichever outcome the trade architecture selects.
I feel like the walking around test just works. You walk around France and everyone has small houses and small cars. A lot of average people don't have basic amenities like washers and dryers and air conditioning.
Yeah Paris is a beautiful city but that's kind of a non-economic thing to appreciate. Alaska is beautiful too but it's just a different dimension than the sort of thing we're talking about here.
Washers, dryers and air-conditioning are not considered basic amenities, that’s why people don’t have them. If you build homes to be energy-efficient in traditional architectural styles, AC is not required.
Likewise most of European housing stock is quite old so there are no utility rooms in individual apartments, etc, so there are other solutions. Likewise we line-dry. It’s much better for the clothes. We also tend to have fewer clothes than Americans but of higher quality so we treat them carefully and give them to the dry-cleaner. A lot of them even have a delivery service.
I am also not dating a supermodel because I don't want to be. It's true that Europe has a weird thing about air conditioning, but wealthy people in europe tend to do what americans do, buy the appliances and use them. Cultural reasons are a little bit true but a lot of cope
I agree, it’s definitely changing with younger generations. As clothes are no longer made well and everyone buys from H&M / Bangladesh anyway there’s very little benefit to *not* just drying everything in the dryer.
Because they don't have cars 😂. France and Germany have much higher per capita rates homelessness than the US. Although as a tourist you might see more homeless in the US since it tends to tolerate more public disorder in its large cities.
A closer look at the statistics tells us that the Franco-German definition of homelessness is much more inclusive ("is on a public housing waiting list" vs. "sleeps in a car") because a much higher proportion of the American homeless population is also unsheltered. This also matches the experience you get by talking a walk.
Nonsense. Constant-price PPP doesn’t reflect productivity in its full meaning, just raw volume. Other factors like quality play a role in products and the value consumers derive from them as well. Current-price PPP is in fact the more suitable measure when looking at secular economic productivity in general even as Garicano tries to appear sophisticated here by anchoring prices. An epicycle of narrow use irrelevant to the argument made by Krugman.
Disparities in health care and outcomes, and in mortality, are notably absent from this discussion.
True but notably Asian Americans have a longer life expectancy than Japan. As a subgroup, Asian-Americans would be 3rd highest in the world. Hispanic Americans were about 81.3 which is not too far off Germany and the UK. There are 68 million Hispanic Americans, which is about equivalent to the UK.
I take your point, but I think this gap will continue to shrink in the coming years as overdose deaths decline.
This. Most of the gap in mortality is that America is significantly more violent place
And why is it a more violent place? It is not unconnected to the socio-political model and political economy of the US.
There are three big reasons
1. The US is significantly more diverse than European individual nations (not Europe as a whole). Different populations have different crime rates and even control for factors such as income and education crime rates are still higher. Europe is currently experiencing this as it diversifies and seeing an explosion of crime
2. culturally Americans seem to be significantly more high risk high reward and individualistic. That works in some instances(business) but it is disaster in others, particularly around crime
3. We just have more guns.
What is the source for an explosion in crime (and homicides)?
https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Crime_statistics
It’s literally just immigration and poor integration. Actual white Europeans are getting a lot less violent because the population is aging lol
Americans live less than Europeans at every income centile. Yes, the discrepancy is lower at the very top, but violence alone does not explain the difference.
Also, is violence not something that a country as omnipotent as the US claims it is should easily solve? After all, this article tells us how it is superior to Europe in all things that matter and I assume that how long you live tends to be the most important thing for any sane society.
Again, there is so much variation here and when you say Europeans, which Europeans are you talking about?
Places like poland Bulgaria and Romania has about a similar life expectancy than the US. So which Europe?
People say “Europe” as a way to hide their hands
I don’t know if you know this, but countries have different cultures and those cultures lead to different behaviors. America has always been a significantly more violent place than Europe (it makes sense, considering the self-selection of people who immigrate to the US). And we have a lot of guns.
Whoever said America’s omnipotent? lol
The article does not make the claim that America is superior than Europe. In fact, they explicitly say there are some significant deficits. But they make specific claims about economic stagnation between Europe and America. And again none of this is new! The EU says it itself! European leader say it! I don’t understand what’s this big coping thing you’re doing lol
The data I mention in all my posts refer to EU average (or EEA where there are no EU-wide statistics).
The article clearly states that some second-tier cities from the US are somehow superior to their EU equivalents (or even top tier EU cities), which is absolute nonsense if you look at most quality of life indicators or actually use a proper GDP/capita PPP comparison (and it's not at constant prices). That's why Europeans (like myself) feel the need to respond - because the comparisons are outrageous.
As to why EU leaders are so critical - that's because our culture is completely different. Although EU is made of 27 countries and probably even more cultures, on average we tend to be significantly more critical of ourselves and others, while the US tends to be extremely positive.
That doesn't mean that the competitivity deterioration conversations in Europe are not justified, just that we are more vocal about risks. Meanwhile, the conversation in the US is mostly positive even for topics that we in Europe would consider dramatic - rule of law, public finances, lack of competitiveness in several large industries where the US used to be relevant, etc.
Average income of American Asians is quite high and there is a huge correlation between wealth and morality. So...
So you say lower health expectancy is just the result of racism? Why exactly should we cherry pick ethnicities?
That's an uncharitable reading of the data and I think you should reflect why your mind went there first. Another reading and my intention is that some communities have figured out how to have European/Asian life expectancies in America and perhaps the rest of the country could learn from them. Asian-Americans have the highest income of any racial group, which might tempt folks to write this off as simply a money issue.
However, that is not the case of Hispanic communities, which are poorer on average than white communities. It is ok to read other intentions into writing than assume the worst of someone, but I am on the internet after all.
Americans have much, much better healthcare and healthcare access than most European countries. This is another area of frequent and egregious misinformation. What you get in some countries, like the UK, is markedly worse than even our public system (providers that accept Medicaid) in the main.
And also pay more per capita for that health care and yet don't live as long and are sick for longer. And this is *before* Medicaid cuts. Re access, many people in US rural areas are losing access altogether as hospitals close. So... "better healthcare" and "better access" depend a lot on how you define "better" and "access".
The US/Europe life expectancy gap is largely not due to healthcare. Americans make different lifestyle choices: https://xcancel.com/jburnmurdoch/status/1641799627128143873#m
And a big part of the higher overall cost of healthcare in America is because we are paying to address the outcomes of that lifestyle.
"Choices".
Like live in a country that chronically underfunds public transportation, maternal health care, children's health,... Yep.
Quality of a health care system isn't all that strongly correlated to life expectancy or other health outcomes. The most important factor in health outcomes is lifestyle choices. And the median American makes much worse lifestyle choices than most developed countries.
"choices"
Of course we pay more for healthcare, we have better healthcare and more money. Healthcare isn’t free, you know. And yeah, it’s difficult to provide healthcare in an enormous country with many very remote communities. I can guarantee you there isn’t a place with a population distribution like ours that is providing better access to healthcare. The fact that you can be airlifted from my tiny remote town to a world beating hospital and be in surgery in under 2 hours is nothing short of a miracle.
No, we (Americans) are paying more for healthcare because we are buying *more expensive healthcare*. Preventative healthcare is less expensive than diagnostic / responsive / restorative healthcare. Americans have more health *problems* (worse outcomes) and then buy more expensive healthcare *solutions* to remediate that. Combined with worse healthful living choices (diet, exercise) and we just spend more on healthcare while still having worse outcomes because we are having to buy the expensive stuff to address our myriad problems.
You can't possibly claim nonsense like this when the US has mediocre outcomes in healthcare compared to all other developed nations, with just a few bright spots like oncology.
It's really incredible how Americans look at the output of a system that is objectively one of the most inefficient and ineffective in the developed world and then claim that it's actually far ahead. This sort of reality distortion and exceptionalism make any rational debate impossible.
If you want to see just how detached from reality your claims are, perhaps look at how well your system performed during COVID: you managed to have double the death rate of Europe despite having a one month advantage to prepare (or about 4 times worse per capita if you compare the performance from the moment COVID started to accelrate in the US). The US system performed worse than even Eastern Europe on aggregate, just as it does when it comes to child mortality or mortality from other causes preventable through good healthcare policies.
PS: please allow me to laugh at the airlift miracle specific to the US. We have had that in Romania for over 15 years and we're one of the poorest countries in Europe.
I agree with all of this. It's also true that the US market has very literally subsidized pharmaceuticals research and development for the rest of the world for decades. A lot of that has focused on "elective" treatments or rent-seeking (eg viagra and endless patent extensions on SSRIs), but this is the same R&D industry that also got a working COVID vaccine in under 12 months based on decades of government-funded research.
Again, it seems like you're arguing against a straw man version of better. The US has higher infant mortality, material mortality, higher diabetes rates and lower lifespan that the EU. And outcomes for Black and Hispanic residents fall far below the median. US health care is tied to employers, and medical bankruptcy rates (66%) are THREE TIMES higher than the next highest country. I'm confused what's "better" about that. Better than the 1700s? Sure. Better if you're wealthy? Yep. I'll agree with that.
They do that from the Alps all the time.
The only one misinforming people is you. Our version of healthcare is laughable with its high cost due to its for profit nature, low access because of those cost, worse outcomes (health wise and bankruptcy wise). The only area it outshines the rest of the developed world is in health outcomes for the super rich.
How could you write this without throwing up in your mouth?
Is it? You might want to amend that to 'wealthy' Americans: https://eleanorreagh.substack.com/p/a-tale-of-two-health-care-systems and over 41 million working age Americans have medical debt: https://www.commonwealthfund.org/publications/newsletter-article/survey-79-million-americans-have-problems-medical-bills-or-debt
If they’re rich. Not on average and definitely not as a return for investment. Valet parking doesn’t save anyone’s life either, which is why European hospitals don’t have it.
See also: food. My EU friends in the US bemoan the terrible state of our food options. At the population level, we *know* that diets high in refined foods and low in fresh vegetables lead to long term health problems and lower quality of life. Diabetes rates, for example, are 50-100% higher in the U.S. than most E& countries (ref: https://ourworldindata.org/grapher/diabetes-prevalence?tab=table)
The UN has consistently ranked the US top 5 in food quality and safety (funnily enough the US has stricter food label laws). It’s just Americans eat significantly more and chose way worse foods
At the end of the day, US businesses have strong lobbying and face comparatively weak regulation.
Case in point: glyphosate is commonly used as a preharvest dessicant in the US, so it's commonly found at low levels in non-organic grains. This use is not allowed in the EU. And a range of pesticides are approved for use in US that are banned in the EU and China.
“It’s appalling the U.S. lags so far behind these major agricultural powers in banning harmful pesticides,” said Nathan Donley, a senior scientist with the Center for Biological Diversity and author of the study. "
https://www.globalagriculture.org/news/quarter-of-pesticides-used-in-us-are-banned-in-the-eu-study/
This is funny because European farmers have been protesting for a rollback of some these bans on pesticide and Europe has a pretty strong farmer lobby, where they literally will show up to capitals and those manure at politicians
Yep.
In the US, farmers get direct payments from the government on top of a range of subsidies, predominantly for corn and soy. And while US farmers are very politically engaged, its really the agribusiness corporations that have captured the regulatory system here.
As they do in the EU. The EU budget was almost derailed because the EU was trying to lessen farmer subsidies; and the Mercusor trade deal might not pass the EU parliament because of farmers.
Farmers, particularly polish farmers are going to be a real sticking point for Ukraine accession into the block
It is true that agri-business lobbies really hard, but they almost never pull the stunts European farmers do (often for terrible reasons) and it’s a lot easier for the US government to overrule them (due to the nature of the political dynamics in the US vs EU, perceived value by the public and the difference between a unified federal government vs whatever the EU is.)
One example is that the US agribusiness *hate* the current tarrifs and immigration crackdown with a burning passion but everyone just ignores them lol
There is a quality difference in ways that wouldn’t be caught by the UN. But yes it’s mostly down to choice and preference and values.
I mean they’re different regulatory regime. Europe is significantly more cautious and has a do no harm or approach while the US has a more prove that there’s harm approach.
Yeah, I mean it’s really just Americans eat almost 1000 calories more a day than Europeans, walk half as much, drive twice as much, eat out significantly more, and has giant portion size.
I can easily get fresh produce or bread that rivals that in any of Europe (I still haven’t taste any fruit that’s better than California’s and San Francisco weirdly has a ton of French bakeries filled with French people lol). But Americans like their junk food and McDonald’s. 🤷🏾♂️
I am Canadian so fresh produce is more seasonal compared to somewhere like Cali. But I live in Europe. I find that you can find top end food basically anywhere, and in Anglo countries we do better at importing other cultures whereas France or Italy only do a few foreign cuisines well.
But ON AVERAGE and per price, the food in Europe is more likely to be high quality and well prepared, whereas we have more crap in NA. You see too (like we already said) that the share of highly processed food being consumed is much higher in the U.S.
It does look like choice more than availability drives the difference, but I enjoy benefitting from the overall expectation of high quality in Europe even if things like good Mexican or Thai food are harder to come by.
The thing is, European spend almost double of their income on groceries than Americans do (they also spend more than Canada which I found interesting).
Now, as far as eating out and junk food, you’re right America’s really do love shit food there’s no way around that 😭 looking at the share of Americans that eat fast food compared to Europe is actually insane
Where do your EU friends live? As a native Bostonian resident in Vienna, Austria, I would not say that food options are significantly better in Vienna than Boston. Boston offers better produce and much better sea food options. Vienna has better dairy and cheese. Better bread in Vienna in general but Boston does have excellent bakeries if you know where to look. Restaurants are arguably better on average in Vienna (especially Italian) but not dramatically so.
Yes, food quality varies considerably within the US, and comparing Vienna to Boston isn't really a good "median to median" comparison. Produce in CA is generally great (and very regional). Good bread is hard to find most places. A lot of recent growth in US farmers markets and farm-to-table operations. But from packaged food to restaurants, the food options at most interstate exits and suburban strip malls are low in fiber, high glycemic index, and highly refined.
Yes. Using two super-star food cities as representative of their broader populations is misleading. Food options in US metro areas are much better than what the average resident has access to, and Boston is better than the average US city. I'm guessing a similar pattern applies in the EU, but I know less about the urban/suburban/rural stratification there.
86% of Americans live in metro areas.
Nordic Americans live just as long as Nordics in Europe. In all likelihood, the same is true of German Americans, French Americans, Italian Americans, etc. The longest lived people on Earth are the Japanese. Japanese Americans live longer.
Have you looked at how fat Americans are though? And lets not even bring up demographic issues...
Simply not true: https://www.commonwealthfund.org/publications/fund-reports/2024/sep/mirror-mirror-2024
Sure, if you want to focus narrowly on the healthcare systems. The problem is that the data consistently show that healthcare outcomes overall are poorer here. It’s an “issue” that most Americans are covered by employer insurance, because unlike countries with universal health insurance (essentially all other developed countries), a lot of Americans can’t get health care at all, high-quality or otherwise. If stagnation means universal access to affordable health care, I’ll take stagnation.
This is not to say that Europe doesn’t have some particular economic issues, and in fact, it may be a good thing for Europe that the US is no longer a reliable partner so that they’ll get motivated to deal with them. This is not a good thing for the US, or the rest of the world, however.
If universal healthcare is really as good as proponents preach (lower cost, better outcome), enacting it in the U.S. would stir more economic growth and Americans will have as good healthcare as Europeans at the cost of *even* higher wages. So Europe must be doing something double wrong to deserve stagnation.
But the point here is that Europe really isn't as badly off as the stagnation pessimists believe. High health care costs *are* a drag on the economy and personal finances and well-being. European systems deliver high-quality health care at a lower cost, meaning Europeans don't have to worry about being one serious illness away from bankruptcy.
Economic stagnation eventually crushes universal healthcare systems and forces austerity and cuts.
I haven't the faintest idea what this means. How does anyone know for sure what will happen in the future? I don't see how universal health care will result in the deaths of millions. We're consigning tens of thousands to poor health and early death now.
I very much appreciate the focus on data and facts about Europe’s economic stagnation, rather than rhetoric about how things that are often not even relevant for the economic comparison are supposedly worse in the US, as a form of 'Eurocope'. If Europe wants to improve, we first need an honest understanding of the underlying facts and problems
We also need to understand the drawbacks of a certain socio-political model. Otherwise it is just the typical one sided promotion of a right-wing agenda. All of this has been a trope ever since the 1990s, if not longer (in the 1970s: JJ Servan-Schreiber, Le Defi Americain), often with as goals to push through aims that they tend to call deregulation, flexibilisation and liberalisation.
* One big source of EU regulation is the business lobby itself, and especially the push for harmonization and standardisation (this cuts out the protectionist ploys by national governments and power bases).
https://samf.substack.com/p/how-much-are-liberals-to-blame-for
Yeah, it's not clear whether the US software industry (social media addiction/division/etc.) is actually beneficial. Unfortunately, Europe pays the costs even if it doesn't develop the software itself. And AI development could be far worse than anything we've seen so far with social media: https://www.youtube.com/watch?v=7wy3xyoXYt8
Side note, the article mentions that the median Meta employee earned $388,000 in 2025. I believe Meta is known to pay more than other tech companies because many people have ethical issues with working there. And of course Meta is a participant in the AI suicide race. I give European protesters a lot of credit for working to stop the sale of chips to irresponsible AI firms: https://pauseai.info/amsterdam-protest-2025-december
https://i.imgur.com/hGgQoGg.png
Most of this is outright false lmao.
Please provide the right statistics then because those figures seem to match the publicly available information.
Just for starters, the WHO healthcare “ranking” includes a 1/3 segment on the opinion of WHO staffers.
And look, wouldn’t you know, a plurality of them are Europeans. Who could have guessed?
Around half of the statistics have similar issues. Like, for example, that the “World Happiness Report” doesn’t measure happiness. It measures “satisfaction.” When you ask people about happiness, neither Europe nor America are particularly happy. Who are the real happiest people on Earth?: Latin Americans.
Or take “social mobility.” If you have an artificially compressed income range, then it’s pretty easy to climb that income range. After all, it’s just a few grand. That’s typically called *relative social mobility*. But when it comes to *absolute social mobility*—i.e. the ability of people to out-earn their parents measured in dollars, not percentiles, America ranks quite highly.
But cherry-picking of data aside, the the entire bottom half suggesting is pure, unadulterated bullshit. As would be obvious to anyone with a smidgen of self-awareness.
You are the one cherry picking and using ridiculous explanations like the WHO being biased.
Let's exclude the subjective charts, like happiness index or satisfaction with life (where actually European countries takes the top spots) and even mobility. All the others are objective measurements and reflect reality.
As ever, aggressive insults and a Social-Darwinian inclination is the true nature of the Right.
Markets need certain 'leftist' conditions to fully function, such as equality before the law. Which the radical-right undermines.
Oh man, appearing sophisticated by dazzling one’s audience with jargon has nothing to do with facts. You can find endless superficially impressive scientific prose in any half-intelligent climate denier or anti-vaxxer as well. Garicano is in fact loose & misleading with his measures here. Europeans should be alert to losing the unique value we offer in the global economy by Americanizing ourselves, making ourselves a second-rate dependency on a declining hegemon à la Latin America. Beware the Chicago boys!
If you would respond with facts and statistics of your own, I could take your claim seriously. Now you´re just saying words without meaning
Read my top-level comment.
This article is exactly the kind of trigger we needed.
Over on r/EU_Economics, which is now the 5th largest economics-related subreddit, we’ve started a slightly ridiculous but hopefully useful six-month social experiment: building an open-source economic theory for Europe, with the community contributing, criticising, refining, and being credited.
The working title is:
The EU Economics Open Source Collaborative Baseline Growth Theory
The basic idea is simple: Europe’s debate is too often framed as growth versus welfare. I think that is the wrong frame.
A strong social baseline may be what allows societies to tolerate disruption, reform, competition, failure, and renewal. But if growth disappears, that baseline eventually becomes unaffordable.
So the tension is:
Growth pressure without baseline resilience creates rupture risk.
Baseline protection without growth renewal creates fiscal decay.
We’ve posted Version 0.1 here:
https://www.reddit.com/r/EU_Economics/comments/1tdocjx/the_eu_economics_open_source_collaborative/
If anyone here enjoys economic argument, data, European policy, institutional theory, or simply telling people on the internet why their model is wrong, please come contribute.
This is not a manifesto. It is a working draft.
A fun one, hopefully.
The opening sentence of last paragraph falls under the rule "show, don't tell."
I find Krugman's view refreshingly balanced, he's willing to acknowledge that Europe does objectively better on some metrics while lagging on others.
The US outperforms Europe in software, but can't seem to build a railway or a ship without it turning into a budget disaster. What's better or worse depends on whether you prefer a B2B SaaS platform or a train platform.
Of course the UK can accomplish neither, which makes me suspect these jeremiads about "Europe" are actually mostly about the UK.
You're perspective is imo 25 years or so out of date, at least in germany. Germany is mostly running on old train stations, all the new ones are disasters. In fact, all public infrastructure here is increasingly like this; Old infrastructure deteriorates but at least works without massive investments, new infrastructure are complete clusterfucks, budget disasters at best and just plain not working at worst.
As much as I hate to temper German self-flagellation, a look at the NYU Transit Cost Project database shows that terrible failures by German standards measure as fairly standard overruns by American ones. That's not to say that Germany doesn't have room to learn from better performing countries, but things could be much worse.
New York is famous in particular for this, though. Comparing one of the worst-run cities (in terms of public infrastructure) in the US to the average performance in germany is damning with faint praise.
"the NYU Transit Cost Project database" is a database recording transit projects around the world run by the New York University. You can go to https://transitcosts.com/new-data/ and see under heading 4, comparing avg cost/km per country, US is $656M/km at number 7, while Germany is $369M/km at number 25.
France builds still, and Italy actually has good HSR if i remember correctly. Did you se the chart with the cost for nuclear plants? France was an outlier, never having really lost the muscle memory for it.
This a myth that really doesn’t check out; the reality is what can be built is incredibly dependent on where you are in the states. Florida routinely builds trains and infrastructure in under 3 years; Texas is building out solar capacity faster than most nations not named China. Texas and Alabama build housing at pretty rapid clip and have managed to keep housing costs relatively low.
You can see it in the migration data in the states as citizens move to the higher performing states
Trains in NA are ass compared to Europe and that is simply a fact. I know the Florida train and it honestly is good for NA and poor by any competitive international standard.
Yes, because the US prioritize freight rail over passenger rail. The US has one of the densest, most profitable effective and efficient freight rail in the entire world. It has five times more freight rail than Europe, and is second only to the Chinese.
Different countries, prioritize, different things and that’s OK
Maybe but as a train fan I think the fact we don’t have a high speed rail network in northeastern Canada / USA to be a travesty.
Get off right downtown after a spacious smooth ride with minimal security hassle, showing up at the station 10 minutes before departure?
Straight into my veins.
I agree. But Americans are fickle about transit and the NE is some of the hardest places to build
East Asia is lightening fast I’m sure but there’s a world of difference between Europe and NA. Plus you dont have to build as fast when you already have the infrastructure. What new is there? I routinely take HSR all over France, Switzerland, to London, Italy, Germany… you clear 300km on the reg.
Fair enough, but the US isn't all sunshine and unicorns either, is it? Swedish ICT productivity compares favourably to Louisianan.
The "America" the authors are comparing to is kind of given away by the name of the 'stack, though.
The author makes a really compelling point though that we should try to compare like to like. Comparing Sweden, one of the wealthiest countries in Europe, to Louisiana, one of the poorest states in America doesn’t make any sense.
A better comparison would be where the Swedish settled in America in mass - Minnesota. And that comparison makes it pretty clear that the Swedish and their descendants in America are significantly richer and more productive than the Swedish back in Sweden.
The actual critique of America is pretty straightforward, but often missed because Europeans don’t understand America. the central issue is the wide variability of access to quality services like healthcare or education for the Bottom 20%. If you live in Massachusetts or California, you have basically public healthcare that provides quality rivaling any of that in Europe. But if you live in Texas or Alabama, you will not have that. Most of this is because states choose very different policy outcomes.
So yes, if I was in the bottom 20% I would rather live in Europe. But the top 80% is significantly richer.
A European academic colleague of mine who worked in the US (East Coast) years ago put it pretty succinctly. He said the US is the best place to be rich and the worst place to be poor.
It's cliche to claim the US struggles with poverty relative to Europe. I'm not sure the data really bears it out. Our World in Data says the share living in extreme poverty in the US is 1.1%. That's high by European standards but not terrifically high. Sweden is 0.8%, Spain is 0.8%, Italy is 0.9%
https://ourworldindata.org/grapher/share-of-population-in-extreme-poverty
A more inclusive measure of poverty: "Share of population living on less than $30 a day". By this measure, the US looks comparable to Europe. It scores close to Sweden or France, and beats Spain, Portugal, UK, Poland, Italy:
https://ourworldindata.org/grapher/poverty-share-on-less-than-30-per-day
I myself am a long term unemployed Medicaid recipient with chronic illness in the US. I'm not exactly sure what aspect of my life is supposed to be uniquely difficult in the US relative to Europe. I'm reasonably happy with my Medicaid coverage.
Fair point-the comment was from 30 years ago and really spoke to how wealth creation is baked in to being American in a way that is not really replicated in Europe.
There are slight Caveat; it’s also great to middle class and more middle class people are moving into the upper middle class: https://www.wsj.com/economy/more-americans-are-breaking-into-the-upper-middle-class-bf8b7cb2.
It also depends where you are poor; Louisiana vs Massachusetts is very different.
And it also depends on human capital; research has consistently show that poor immigrants do significantly better than the median poor american (or immigrants in Europe for that matter). The hypothesis is that the nature of US immigration selects for high human capital and risk takers, and immigrants tend to cluster in high productive areas
But yes the over all sentiment is directionally correct
It's kind of unfortunate that the Garicanos tend to use "America" as a toto pro pars metonymy of Silicon Valley, because studying what sets American states apart can be very informative.
As an example, in February Pieter wrote in WiP about how hard it is to fire Europeans. If you're interested in increasing employee mobility, it's quite important to know that while all American states except Montana have at-will employment (i.e. you don't need to give a reason for or notice of firing someone), what sets California apart from the others is that it has also long banned non-compete clauses. This facilitated knowledge diffusion, which gave California the edge over Massachusetts, which also had a strong ICT sector in the 1980s.
You can also wonder how much of the superior economic growth (if there is any) is down to the increase in both the public and private debts ever since the Reagan-era (or the expansionist policies in the aftermath of GFC 2008). Current EU is mindful of the public debt positions in an ageing continent, current Trump and GOP is not.
Those debts and trade deficits in turn lean on the privileges the dollar brings and the petrodollar recycling.
“Current EU” hides a bit of misdirection; 2 out of the three largest EU nations, France and Italy, carry quite large public debt burdens, with Germany currently rapidly expanding (as they should for infrastructure but it’s debateble if they are spending wisely).
US household debt is also lower than many EU countries, like France, Sweden or Denmark, and is not that much higher than Germany’s, according to OECD
Corporate financing in the US is also heavily skewed to equity vs Europe; though the one big caveat is private credit
The US' deb/GDP ratio is worse than France's and way, way worse than the EU aggregate.
Although in 2006 (20 years ago), the US had significantly better debt/GDP compared to the EU, the US has issued debt of over 60 percentage points of GDP to support economic growth, while in Europe the increase was of only 15 percentage points. Now it's 40 percentage points higher than the EU and the gap just widens each year.
PS: Germany's debt/GDP is not "currently expanding rapidly", but rather remains at the constant value of ~65%, as it was 20 years ago.
Again aggregated into the EU is a misdirection. Because not all countries are the same and they have radically different baselines and capacities. Europeans always do this thing where they use the EU and Europe interchangeably and they’re very different! The debt burden in the France is fundamentally different than the debt burden of Bulgaria!
Yes, that debt burden of the US is worse than France (but only 10 points) but
1. The US has had the significantly better growth and productivity.
2. The US is the reserve currency.
3. The US debt significantly more sustainable because it has a massive amount of taxing space; the share of taxes that the US takes of the economy is 25%. For France it’s 44%. Raising the taxes to even 2019 levels we basically wipe out the US federal deficit. Further, there’s a built-in stabilization mechanism for pensions in the US where if it’s not resolved by 2032 there will be massive cuts automatically. Try doing that in France.
And we haven’t even talked about Italy lol or the UK (though it’s outside of the EU). It’s not enough to look at debt and just say oh it’s bad. The question is whether it’s sustainable, and the context of the debt. Hell the EU has even admitted itself by commissioning a report by Mario draghi who has said the same things!
And for Germany is not about the debt now, but the trajectory. The German government has even openly admitted that they expect debt to rise by 15 points to 80% by 2029 (https://uk.finance.yahoo.com/news/germanys-debt-rise-above-80-152843546.html)
Look, you kind of used this card already in 2008 telling us how the debt in Europe in unsustainable and we need to reduce social spending.
Since then, the public finances in US deteriorated significantly, while the situation in EU (on aggregate) looks a lot better without cutting benefits. And please stop using the "EU is a bunch of countries" argument because we have EU wide statistics that provide aggregate (not average) values.
And please be realistic about how difficult it is to reduce the deficit - you're not going to reduce the 120% debt/GDP to EU levels by just increasing taxation and even if it was mathematically easy, there seems to be zero political will and capability to use this lever. Multiple administrations have tried to address this issue and the yearly deficit keeps getting worse and worse.
With regards to stabilizing finances - sure, let's assume the US is capable of doing it although it has tried and failed in the last 20 years and then claim completely nonsensical things like EU countries can't do it although most of them just did and they cut their debt significantly. Singling out France or Italy might make you feel better, but they don't and won't change the EU situation.
Also - the reserve currency argument is irrelevant, you're not comparing the US to Argentina here. We issue all our debt in Euros and can devalue the currency and make the debt load more bearable if needed.
PS: lol @ the Germany argument. Even if the deficit reached 80% by 2029 (it probably won't), we're still talking about a 45 percentage points gap.
PPS: the GDP growth figure is not the positive aspect you think it is in the context of debt. It's actually worse to have high deficits with high growth because it means your spending is completely out of control even in a growing economy. This is why EU countries were able to managed debt better post 2008.
1. It is important to not necessarily use EU-wide statistics because there is no unified fiscal authority over EU countries. Each EU country has their own fiscal and tax policies, including their own social welfare benefits. They
also have their own debt.
The EU is not going to pay pensions or the welfare of each country , or take out debt in the country’s name. That's why it's important to look at each individual nation and not the EU as a whole. Both Obama-Trump and Biden did reduce the deficit. It just so happened that we had a ton of life-changing events that required us to spend a lot of money, like COVID.
Yes, singling out Italy and France is really important because they are the second and third largest economies in the EU. Yes, it is incredibly important to understand France's fiscal position because if they default or have a fiscal crisis, it will spread to the rest of the Euro area.
"The EU handled debt better after 2008." Is an insane statement, considering that in 2013, the Euro debt crisis almost collapsed the entire European Union because debt issues spread from Greece to Italy to Portugal and Ireland. Do Europeans have such short memories?
Germany screwed up building an airport so badly it had to be partially demolished and rebuilt, and Deutsche Bahn dysfunction has reached memetic levels
Thanks, the bs from Krugman & co. in the last few months became ridiculous.
Even worse, the absolute cope of a slice of europeans that think of themselves as being the European elite that just can't accept we're being subclassed by other countries we feel superior of, for some reason. I say "countries" because, for example in tech, the list goes beyond the US: China, South Korea, Taiwan, etc.
p.s. about "Europe has nice city cores but these are inaccessible to young Europeans". European capitals' centres are inaccessible to anyone who's not in the top-10/20% of incomes, and those are the ones tourists typically visit. The normal person in Madrid or Paris absolutely does NOT live in the centre, that is like 5-10% of the population.
You‘re coping the other way just as badly. If you walk around Vienna you will see that most of the central districts are in fact inhabited by young people. Paris and Madrid are not representative. The fact is people who live in Lyons, Wroclaw or Graz arguably enjoy a higher quality of daily life than Americans who live in similar mid size cities. The truth is boring and somewhere between your negativity and Krugman‘s rose colored glasses - Europe is certainly stagnating and falling behind technologically but it is still in many ways a more pleasant place to live than most of the U.S.
If you think people in mid-sized polish cities have higher standards of living than the average US of living, I don’t know what to say.
I would say you haven't spent much time in Poland lately. Have you been to Wroclaw? I actually lived in Bielsko Biala for two years about 10 years ago, a city of about 170 thousand in Silesia. I rented the first floor of a house on the outskirts of the city. Paid about $500/month, had a small garden, a bakery and grocery store around the corner, running paths and hiking trails behind the house, 5 minute drive to an 18th century downtown with excellent beer halls. Definitely a nicer place to live than Manchester NH, which is a similar size. Even the shopping mall in Bielsko was much nicer.
I've been last year, and while I can't say much about "x square meters cost y euros per month" (because I don't live there), I would define the material standards of living lower than Western Europe for example. It's normal, it was under communism until the 90s, so it's perfectly obvious that the catching-up didn't happen already. Indeed, in a few years the average income could be on par with that of several Western European countries. Surely it was beautiful.
I can say that in my European mid-sized city (with a very old and beautiful centre), 95% of my life, in terms of "how distant are shops/work" is identical to that of a US citizen. I use the car to go everywhere, simply because it's the fastest way to go around, after work I go home, in a home that is much smaller than I could rent/buy with a US salary for an equivalent job, with a much worse car, with worse amenities. It's true that if you go out you can go to beautiful old city centres, but in the end, who cares? Maybe I do that one night a week, and honestly I prefer going to restaurants/bars with other people, it's not that I have a routine of going to the city centre x hours every week.
I would very much prefer a much higher income.
The point is that we don't need to choose, if European economies worked much better we could also have higher incomes, and this stubborn refusal to see what's wrong is maddening.
It's a false dichotomy that we can't have higher salaries and still keep beautiful city centres and stuff like that. Who said that? Replying "but our city centres are more beautiful and blablabla" when someone talks of economics is cope and completely misses the point.
The major problem in European countries like Austria is that taxation is massively skewed to prevent the middle class from building wealth through income, and preserve the privileges of old money. No property tax, no inheritance tax but very high tax burdens on small and medium sized businesses who employ people.
The large car issue works both ways. Driving in the U.S. in a sea of oversized pickup trucks and SUVs is becoming a nightmare. I’m one of those weirdos who has never seen much value in spending a lot of money on a deteriorating asset like a car anyway so I‘m probably not a fair judge.
In many European countries massive taxation starting from middle class incomes is inevitable because, for example, if some states need to spend 400-500 billions per year just for pensions, then there's just no way to reliably generate 400-500 billions of euros every single year, just by taxing the 1k/5k/10k richest persons in the country.
The math just doesn't add up.
And no amount of inheritance tax or property tax will solve this. Property taxes are extremely distorsive if too high, and anyway you can't collect hundreds of billions by taxing 5k super-villas (which will be of course abandoned by riches if you put mega-taxes on them), inheritance suffers from the same problem, and it's easily avoidable.
And just there aren't enough money.
Just try to do the math yourself on taxing the richest people in your country, and calculate the revenue of a huge property or inheritance tax (that anyway will be much lower than that numbers since everyone will try to dodge it). We're light-years away from the numbers needed to pay European states' budgets.
The problem is that we spend waaaaaaaaaay too much and our budgets are simply becoming completely unsustainable from a financial point of view. We like it or not, thankfully it's easy to show, because it's just math.
I, an American, agree with this. As countless recent substack posts have noted, our wealth hasn’t made us happy.
I’m a city person and we’re kind of unusual here but for me the last section is important. It’s already more challenging to do good urbanism here, and poor governance is making it much harder.
Something I've been musing about lately is that "progress" is often antithetical to happiness. E.g. with capitalism, ads tell you "your life sucks, but it could be better with this product". With democracy, politicians tell you "your life sucks, but it could be better if you vote for me". It's probably true that both capitalism and democracy, on average, trend towards making things better (under typical conditions at least--all bets will be off when superintelligent AI eats everything). Yet, comparison is the thief of joy -- constant unfavorable comparisons lead to dissatisfaction. No wonder studies show that gratitude journalling is good for happiness. It helps counteract the ambient tendencies towards unfavorable comparisons.
I don't think people live in the suburbs without a reason in the US. Here too, people who can afford it go to live in single homes as soon as they can. It's a normal preference to go live in peace with much more space if you can afford it, instead of living with other 100 people in a 8 story building.
The reason why there are much less "suburbs" here is that 1) it's much less affordable by the average person, 2) there is much less space to build because European countries are roughly 10x denser than the US (IIRC).
Paris isn’t even representative cuz no tourist even goes where people live. They walk down the Champs Elysee with a bunch of Chinese and Gulf tourists, eat an overpriced meal in arrondissements inhabited by decrepit old octogenarians (7, 8, 16, etc) and think they saw “Paris”.
Paris fucking rocks.
Das hat ja niemand behauptet. Meine These ist dass, die Mehrheit von den Innenbezirken von jungen Menschen immer noch bewohnt sind. Was man jeden Tag im Karmalitemarkt, in der Gumpendorferstrasse oder im Freihausviertel erleben kann. Wien ist als Studentenstadt ziemlich bekannt.
For neoliberals, the so called Progress Movement, and rightists this is hardly a problem. The city centres being a privilege for the wealthy (stop all rent controls, tear down all public housing, no manipulation of land value) and high levels of segregation is exactly how they like to see this happen and has to be promoted, even.
I forgot to write "European capitals' centres".
Rent controls are absolutely a way to worsen home affordability, everywhere, and social housing is just not doable in large swaths of European capitals centres (and even around it).
European capitals are extremely expensive housing-wise, with the centres being comically expensive, but the real problem is that 90% of the city that is not the centre is really expensive, but could be much less expensive by allowing more buildings of any type. And also, the European incomes are just flat or rising painfully slowly, and that is the main problem the article represents.
Cities in Europe have already grown hugely in the past couple decades, and with declining square metres per appartment. As long as there is an excess of money (supply) and a growing wealth gap the housing will become more and more expensive. Billionaires sponsored thinktanks and magazines will not change this.
And yet the housing supply is not enough. Basically the (almost) only reason for housing being too expensive in every city in the world is because the supply can't keep up with demand.
The rest is leftist bs.
The only BS here is suddenly acknowledging whole cities are (too) expensive, not just the city centres of capitals (which you previously claimed).
Obviously building houses takes time, and there is not infinite land. 'Demand' is a function of the excess of money and wealth in the economy. This is directly absorbed into the prices.
In fact I corrected. The city centres are comically expensive and you can't really do anything about that because they're old and you can't build almost anything there. You can't just demolish the old buildings in the centre or Rome to build 20 story condos.
But outside the city centre you can build much more than today, and there's a metric ton of evidence in the economics literature that the reason housing is becoming less affordable is that demand outruns supply in many cities. I can attest this having seen it with my eyes, where a huge influx of students and young workers hit the city where I studied and you just could see rents increasing by the day. It was like +20/30% in a few years. In the meanwhile a corruption scandal in the city basically halted the construction of almost every residential building.
Of course the price of the 9 square meters room in which students will live is not influenced at all by what homes millionaires choose to live in.
I ask you not to follow lefties on this because it's just a huge bs. The reason for the cost of housing is that regulations don't allow to build enough. Full stop.
There is not infinite land, but the idea that Europe is running out of land or can’t be denser is just not true
The weird thing about the US vs Europe debate is how often it assumes Europe is trying, and failing, to become America.
It is not.
Europe is not anti-capitalist. It is capitalist, but with a different social contract around risk.
Markets exist. Companies compete. People build, sell, export, scale, and get rich. But Europe has chosen to keep more of ordinary life outside the casino: healthcare, education, paid leave, unemployment protection, pensions, consumer rights.
That has costs. Higher taxes. Slower capital formation. Less explosive upside. More regulation. Sometimes too much regulation, because Europe does enjoy turning a simple problem into a committee and a PDF with annexes.
But it is not an accident. It is the deal.
Many Europeans are fine paying higher taxes if healthcare is not tied to your employer, university is not a lifetime debt sentence, and losing your job does not immediately turn life into a cliff edge.
So yes, Europe has a growth problem. That is real.
But Europe is not a failed America.
It is a different version of capitalism, asking a different question:
how much of ordinary life should be exposed to market risk?
Of course, but this is actually the crux of the issue - the natural aversion to risk. Tesla, for example, could have never come out of Bavaria with billions of Euros invested into a bold high risk venture. But perhaps there needs to be less aversion to compete globally in 2026.
Mistral, Airbus, Arianespace and hundreds of high risk European ventures with billions in funding don't exist then.
There is a clear difference in risk tolerance between the US and EU, but that doesn't mean that blitzscaling companies that burn obscene amounts (usually to squeeze others out of the market) should be the model we emulate. In certain cases it is beneficial, but oftentimes it is far from it.
Big brain. Killer argument
You are doing the Lord's work on this! Europe stagnation is tragic and *worsening* geopolitical vulnerability, including dependence on the USA.
US GDP now accounts for most of the G7, up 10 percentage points since 1980. https://www.visualcapitalist.com/wp-content/uploads/2024/12/Breaking-Down-G7-GDP-2024_Site.jpg
By some metrics, the U.S. share of global R&D has remained consistently above 40%, while the EU has declined to less than 20%: https://sciencebusiness.net/sites/default/files/inline-images/image_10.png
Either Europe reforms to embrace growth and innovation, or dependence, vulnerability, and impotence will deepen.
France's Italianization may be a sad sign of things to come: https://www.craigwilly.com/p/is-france-cooked
Thank you for posting this. People always compare SF to Denmark when a more accurate comparison is the outskirts of Lyons to the suburbs of Philadelphia. Italy (60 million people) felt very poor to me relative to America. Milan had very few new cars or housing and despite it's reputation for fashion many townfolk were wearing worn out used clothes. Overall Italy felt much closer to Malaysia than germany. Northern Germany is not exactly booming and the UK outside of London is falling far behind. I am not sure if AI is the correct goal here. The rise of Asia (first china and now India) is threatening the traditional lead in manufacturing so Europe needs to become more competitive in its core competency.
"Italy (60 million people) felt very poor to me relative to America. Milan had very few new cars or housing ".
This is very interesting because it's something similar to what I've noticed (and I always tell this when I talk about the trip), but in reverse. I've been in the US last year, it looked like everyone had the last Tesla Model 3/Y model. If I had to guess, maybe in Milan you see a Model 3 out of every 20-40 cars in the streets (various model years from 2017 to 2025). In the US (CA) I've seen a giant flood of last-year Model 3/Y everywhere, and many were not base models. Never seen so many Teslas in one place.
In general it looked like the average car was a 50-60k car, here is more a 20-25k car.
You can definitely claim some areas of Italy are poorer than the average US city, but picking Milan out of all possible cities is just nonsensical.
I personally dislike Milan, but it is extremely rich and the quality if life is comparable to top US cities and we're not even including its beautiful surroundings in the equation. I'll also challenge the used clothes claim - even if you dislike like their fashion preferences (I do), people are generally very well dressed (as in comparable to the richest areas in the US) and you rarely see worn out clothes.
There are other cities in the EU where people dress poorly, I'm sure. Milan is not one of them unless you equate poorly with kitsch (which is subjective).
Hello seek. My claim about Milan is most of the wealth is tied up in foreign money (Russian, British, and french) and not really spreading to the locals. If you were to talk up to a well dressed person in Milan (and I agree there are many) you will inevitably find out that they are not local milanese and often not Italian at all. The comments about the clothes were the taxi drivers, school teachers, or nurses (our daughter got a bit sick towards the end of the trip). The level of income for these individuals seems to be at 30%-40% of their American counterparts. An experienced nurse in nyc (probably most comparable to Milan) is going to avg 100k per year in income. The ones we met in Milan were just not even close in comparison.
I'm sorry, but most of these claims are just not even close to being factually correct. And that's because you chose one of the wealthiest and most successful cities in Europe and decided to somehow make it look poor even though no statistic supports it. At least choose something like Bari and then try to artificially extrapolate, it's more credible.
Now for the counterarguments:
- The median salary in Milan is about 55-60% of the median salary of New York (including for nurses, where the ratio is more like 60-65%) and higher than multiple large US cities. However, cost of living is significantly less than half for rent, transportation, education and healthcare, so unfortunately even the richest US cities have a hard time offering a similar quality of life even though a few have significantly higher average salaries in absolute terms.
- Milan has one of the highest densities of rich people in the world, significant higher than New York or any large US city. Only a few are foreign born. If you index by cost of living, then it gets even better for Milan.
- I visited Milan multiple times and never have I seen a taxi driver that is poorly dressed. Also, it's a funny argument coming from the US, where taxi and even Uber drivers basically dress like in Eastern Europe and you rarely see them wearing a shirt (a common occurrence in any large Western European city)
I really don't like Milan,.but they are definitely not poor or worse off even when compared to the richest US cities. And these are facts, not subjective observations.
I like krugman but this is a good counter to what is often a bit of a bias he has towards Europe. I do sometimes suspect that if the USA had not elected Trump people in general could feel better about the progress of the US. I have visited many times and spent 6 great weeks working in Philadelphia in 85 when I was 25. But now just feel let down and disappointed. Bit like a close family friend we don’t like to talk about much or visit anymore and while they have a better car and bigger house we need find a reason to doubt their wealth is wither well earned or deserved.
>well earned
As an American, I think the possibility that US wealth is not well-earned is worth discussing.
We're known for software, but has US software really made the world a better place? Instagram is giving you body dysmorphia, X is creating social divisions, reddit is relieving you of your ability to think independently, youtube addiction is removing your ability to socialize, etc.
And now misaligned superintelligent AI is threatening to kill everyone: https://www.youtube.com/watch?v=7wy3xyoXYt8
Maybe the best Europe can do is cut off the chip supply to the AI companies before it is too late: https://pauseai.info/amsterdam-protest-2025-december
America being richer than Europe is the whole point. Of course America is filthy rich. The US produces more fossil fuels than any other nation. It has the second most farmland after India, and you can't grow nearly as much in India. And then it has every other kind of natural resource, amazing natural beauty that drives tourism, two perfect coastlines that never freeze, and oh yeah - being two huge oceans away from any country that might be a threat. America is the country that got all the powerups before the game even started.
And yet, European tourists feel like it's a third world country when they walk around due to all the homelessness and run down areas. And we have a third world life expectancy too, coming in just above Cuba and just below countries we like to make fun of like Albania. We're the rare country where a cancer diagnosis can send you from middle class to bankruptcy. Where people work plantation hours just to get by.
That's the point. We are, by every objective measure, super rich as a country. But only the top 0.1% can tell. That's a massive failure of our society.
(1) Paul Krugman reminds us of those scholars who claimed the Soviet Union was doing great and about to catch up with the US. It wasn’t, and it didn’t. It collapsed. (I am sorry if this reads like Schopenhauerian eristic, which is not my intention.)
(2) Now the numbers: Europe vs the US on forward P/E: (source: the US-made ChatGPT)
May 2006: Europe ~14–15x, US ~15–16x
May 2016: STOXX 600 ~15.6x, S&P 500 ~16–17x
May 2026: Europe/STOXX 600 ~15x; S&P 500 ~21x
USSR was growing faster than the US for decades..projecting out a trend line is dumb, but not nearly as dumb as you are implying those scholars were.
The “Soviet statistical lie” was a stable Cold War equilibrium under asymmetric information.
(1) The Soviet statistics were one big Patemkin-village as the Soviets had both strategic incentives to lie to the West (they couldn't possibly lie to their own public, given that the empty shelves were at full display in their shops).
(2) They also knew the US would optimally pretend to believe these lies (see below).
(3) The “catching up” lie was deliberately taken at face value by the US government to justify the Vietnam War, the huge defense budget, etc.
(4) Of course, the US government was fully aware of the Soviet lies - as well as the incentives behind them - the empty shelves were perfectly observable by the embassy staff, plus the US had spies inside the Soviet Union. After all, it was advised by top game theorists, including Schelling, Shapley, Intriligator, and others.
(5) But the US government also knew - just like the Soviets knew that it knew, etc. (in a common knowledge equilibrium) - that verification of these lies was extremely costly for the US public.
(6) Acting in its own self-interest, the US government optimally chose to accept the Soviet statistics at face value.
(7) Which created a stable “Soviet statistical lie” equilibrium until
(8) In 1990, the truth came out, and it became crystal clear - through a very easy backward extrapolation - that, e.g., in 1970, the Soviets could not have been such an economic powerhouse as - at the time - they claimed they were.
The idea that all Soviet progress was fake is itself a fake story. While in the public imagination in the West the fall of the Soviet Union is seen solely evidence of how a socialist planned economy does not work ever, the reality is that it very much did work to improve living standards for several decades before hitting an oil crisis due to global factors in the 1970s which upset the foundation of both its economy and also its foreign policy.
It's a resource curse story more than a socialism vs capitalism one, but that story is less politically useful.
https://www.energycrisis.com/reynolds/SovietDecline.htm
You seem to be thinking of the 1965-1985 period. I'm thinking of the 1925-1955 period. There were very different dynamics.
Then I agree
Actually, I implicitly claim quite the opposite: they were smart. They enabled an equilibrium with the Russian Potemkin-village economy under common knowledge, with the clear benefits for the West and costs for Russia. Of course, I mean, common knowledge, excluding the Western public. It is clear that public support was necessary for the arms race to continue or intensify (under President Reagan). The part that I have difficulty explaining is why the Russians, who knew all too well the true Potemkin state of their own village, did not connect four dots: (1) that fake village, (2) the common knowledge about (1), with the above qualification, (3) the arms race, and (4) the acceleration of their and the Soviet bloc's collapse.
The US is undoubtedly an economic superpower with a political economy that drives growth. In terms of wealth and production, they are miles ahead of Europe and pretty much everyone else.
How much of that is due to historical, structural and geopolitical factors is a matter of debate. After all, they were the only industrialized country not absolutely devastated by the Second World War. Their fantastical military presence all over the globe and extremely aggressive foreign policy over the past eighty years has ensured that they are (almost) always in the position of ensuring their own interests. Immigration and a younger population is another major factor, as is the dollar's dominance and capital accumulation.
All that being said, many European countries could certainly learn something from US policy. I don't think anyone is arguing against the American ability to innovate. Of course, it's a bit misleading to draw comparisons between the US and some monolithic "Europe" that doesn't really exist. Different European countries practice very varied economic policy. Perhaps more comparisons should be drawn between US states and single European countries? Also, the UK is somewhat in it's own league nowadays (with Brexit and due to other factors), and its presence in these US-EU comparisons always muddles the picture a bit.
Nonetheless, us Europeans should probably ask ourselves what we could do like the Americans to drive growth on the Old Continent. However, the US should absolutely also ask themselves what they could do like the Europeans to drive up their quality of life.
At the end of the day, it's more interesting to wonder why the world's greatest economy is not producing better results on some key measurements on living a good life, such as:
-life expectancy
-infant mortality
-treatment of illness
-prevalence of preventable deaths
-literacy
-prevalence of drug addiction
-crime
-violent crime
-homicides
-imprisoned population
-experience of happiness
Taking into account the difficulty of forming a coherent picture of Europe as a whole, it can be said with some certainty that despite its economic stagnation, Europe outshines the US handily in all of these measurements. Whether that is despite or because of the differences between the political economic models in these places is hard to say. In any case, they should spark some questions in the US, as much as measurements of production and wealth should spark questions in Europe.
Thanks for the comment, and agreed that "Europe" hides a lot of differences inside. May post last week (which may have spaked in part the conversation) was titled Two Europes: https://www.siliconcontinent.com/p/the-two-europes precesily on that. Also e.g. on Sweden's lessons for innovation and start ups: https://www.siliconcontinent.com/p/why-sweden-has-so-many-unicorns. And yes, there are many things where the US is doing the wrong policy (e.g. gun laws) where there are no growth tradeoffs. So indeed a lot to think about from the US side. My view is that, from our side, we can learn a lot of the US without acquiring all the "vices" you list.
Quality of life and standard of living are two different things. And to the point others have made about regional differences: if you've ever flown from Munich to JFK or Newark and then taken the NJ Transit train into NYC it feels like you've gone from the first world into the second. One data point, I know, but it never fails to feel shocking.
Yes, of course, but a tired cliche. Most people prefer a cafe with a pleasant view in an Italian piazza. It's always been the comparison for centuries.
No, it's not a cliche, it's what happens when you travel there. America's infrastructure in many of it's flagship cities is a mess. And I'm not talking about enjoying an espresso on a piazza, I'm talking about being able to take public transportation with my third grader and not having to step over a drug addict covered in vomit, or sit in a diner without having some dude wander in with an exposed machete hanging out of his back pack, or having to set aside 70-90% of my salary for day care, private school and 529 college savings plans. In the end, this is about the values one holds, so it's subjective. I'm American and you couldn't pay me to go back, but I know many Germans that won't ever stop complaining about Germany and think the US is the land of opportunity; a shining city on a hill. There is no 'right' answer.
No, it's a tired cliche Eleanor. Read Hemingway or Twain, or countless others on their time in Europe. The exact specifics may may be different, but the overall sentiment is the same, it's more pleasant. Amazing. It's simply not a original observation by a long shot.
My goal here, 'Alfred', wasn't to be original, this was your assertion, not mine. It was to make the point which I closed on; that these are values based decisions based on more than simple pleasantries. I've based important life decisions on it, like whether or not I want my child to have to go through active shooter drills at school. I've also heard it from more and more Americans and reasons are things like 'I can't afford to live in the US anymore', or an ex-colleague telling me at her consulting firm she was surprised by how, without missing a beat, people had a 'Plan B' for moving after the election. But don't take my word for it:
https://www.forbes.com/sites/alexledsom/2026/01/07/how-to-move-to-europe-as-interest-surges-among-americans/
https://www.facebook.com/bloombergbusiness/videos/how-americans-can-actually-move-to-europe/854528904008772/
But many others don't see it the same way at all. As I said, no 'right' answer.
Tldr: Alfred is from Mars, Eleanor is from Venus.
💯
"The entry-level Deloitte consultant job in Madrid pays around €28,000, roughly $33,000 per year, according to Glassdoor. In Charlotte, the largest city in North Carolina, the entry-level Deloitte job pays $63,000."
Ok. But then how much is the cost of health insurance and schooling for the North Carolina worker?
For a deloitte employee? health insurance is minimal. same for public school. Americans who work at large multinational firms have great insurance.
Ok. And how about those who don't work at large companies.
It depends a lot on the employer. Much tougher for small businesses to provide good insurance. Insurance out of pocket is very expensive without government subsidies which some of those expired recently and weren't renewed
It's not just health insurance, it's differences in cost of living + health + college saving + pension saving + transportation + paid holidays + maternity leave (for women) + daycare + others.
You can definitely earn more in the US and if you're very frugal you might save a bit more, but the disposable income is significantly higher only in certain circumstances and especially if you're an immigrant and don't plan on having kids or retiring in the US.
Garicano is right on measurement. Krugman is right on experience. The productive output gap is real and wider than current-price PPP suggests because falling tech prices mask rising tech volume. But European life expectancy exceeds Americas by 3-5 years, healthcare costs half as much with comparable outcomes, and traffic deaths run at a third the US rate. The country producing more isnt necessarily the country living better.
The genuine question is wether the productivity gap eventually becomes a welfare gap. Krugmans model says no because tech gains flow through trade at world prices. Garicano says yes because the producing country compounds advantages in investment, wages, and talent over time. The answer depends almost entirely on trade policy. Under free trade, Krugman wins. Under the tariff and export control regime thats actually emerging, Garicano wins. AI concentrated in US firms accelerates whichever outcome the trade architecture selects.
I feel like the walking around test just works. You walk around France and everyone has small houses and small cars. A lot of average people don't have basic amenities like washers and dryers and air conditioning.
Yeah Paris is a beautiful city but that's kind of a non-economic thing to appreciate. Alaska is beautiful too but it's just a different dimension than the sort of thing we're talking about here.
The small houses test would make New York appear poorer than the rest of America when it is in fact richer.
Washers, dryers and air-conditioning are not considered basic amenities, that’s why people don’t have them. If you build homes to be energy-efficient in traditional architectural styles, AC is not required.
Likewise most of European housing stock is quite old so there are no utility rooms in individual apartments, etc, so there are other solutions. Likewise we line-dry. It’s much better for the clothes. We also tend to have fewer clothes than Americans but of higher quality so we treat them carefully and give them to the dry-cleaner. A lot of them even have a delivery service.
I am also not dating a supermodel because I don't want to be. It's true that Europe has a weird thing about air conditioning, but wealthy people in europe tend to do what americans do, buy the appliances and use them. Cultural reasons are a little bit true but a lot of cope
I agree, it’s definitely changing with younger generations. As clothes are no longer made well and everyone buys from H&M / Bangladesh anyway there’s very little benefit to *not* just drying everything in the dryer.
By the same token, it's much rarer to see people sleeping in their cars in Europe.
Because they don't have cars 😂. France and Germany have much higher per capita rates homelessness than the US. Although as a tourist you might see more homeless in the US since it tends to tolerate more public disorder in its large cities.
A closer look at the statistics tells us that the Franco-German definition of homelessness is much more inclusive ("is on a public housing waiting list" vs. "sleeps in a car") because a much higher proportion of the American homeless population is also unsheltered. This also matches the experience you get by talking a walk.
Going on a walk is not data. This isn't an issue of interpretation.
In what France have you been?
Nonsense. Constant-price PPP doesn’t reflect productivity in its full meaning, just raw volume. Other factors like quality play a role in products and the value consumers derive from them as well. Current-price PPP is in fact the more suitable measure when looking at secular economic productivity in general even as Garicano tries to appear sophisticated here by anchoring prices. An epicycle of narrow use irrelevant to the argument made by Krugman.