Monday, June 27, 2011

Do you ever look at the world economic forest ?


Its really easy to get so darn caught up in all the noise in our political world, and our financial markets, that we fail to step back and look at the forest, from all the trees and leaves taking up our daily mindshare. Periodically, I like to look across the entire world, just sit and ponder what I find, and imagine what the economic future will look like after making some simple assumptions.

How do I this? Well, I take a hard look at the top 15 economies in the world and see where they stand from an economic output standpoint. Then I’ll segregate those top 15 into the 4 major regions of the world. I’ll figure out how those economies and regions are performing relative to their population. And finally, I’ll just imagine a world where people in Asia and South America are just as economically productive as the people of North America and Europe. If that were to happen, what would it mean to the growth prospects for the world economy?

Do you think that Senator Richard Burr or any of the other worthless, POS, good for nothing politicians in Washington DC ever go through this exercise? Fat chance. These people are clueless and they demonstrate their economic idiocy on a daily basis. But maybe someone will read this post and stick the results under some of our politicians’ noses. My bet though, not a one of these clueless idiots would even understand what they’re looking at.

Our forest view of the world economy (2009 stats from the World Bank):

  • GDP $T = Annual economic activity in $ Trillions
  • People M = Population in Millions
  • GDP Per = Annual economic output per person in $ Thousands

image

Observations:

  • It always amazes me when I see that America accounts for 24% of the world economy, yet we only have 5% of the world’s population. For all our bellyaching about how our economy stinks right now, we’re still the best in the world when it comes to productivity (Economic activity per person).
  • Asia – The top 5 economies of Asia have 6x our population, yet don’t even match our total economic activity. Don’t you find that shocking?
  • South America – for all the talk about Brazil, they are still much like a 3rd world country, with only $8 K GDP per person.
  • Russia – Anytime Russia is in the headlines, I’m always thinking this country is big and powerful. Hardly. Russia is a third world country too when it comes to economic activity, producing only $8.5 K per person of economic activity.
  • OK, this is where it gets interesting. Stop for a second and just image a world where Asia and South America are just as economically productive as North America and Europe. That’s where we’re headed in the coming decades. There is absolutely no reason to believe that a human being in Asia or South American can’t be as intelligent and productive as an American or European, right? Right. What would it mean? It would mean that 3.7 Billion people would be producing about $40 K per person in economic activity. Do the math … 3.7 x 40 = $148 Trillion in annual economic activity. These same people are now only producing $44 Trillion in economic activity! The top 15 economies would grow 3.5x in order to accommodate that level of activity! Stunning, absolutely stunning how much growth we have ahead for the world economy, eh?

Someone push this information under the nose of Senator Richard Burr. Tell him to stop coloring in his coloring book long enough to realize that we need to start painting a positive picture for our economic future. We need to stop all the bullshit mud slinging and figure out how to psychologically convince the American people that there is enough economic opportunity out there in the future that we’ll eventually prosper. We just need to get some of these ST issues addressed, and find ways to bring the world up to our standard of living. They’ll grow. And we’ll grow right along with them.

Still, our Republican Party and my state’s Republican Senator only excel in beating us down psychologically. It scares us into thinking the world is coming to an end. We stash our money under the mattress and our economy suffers. Republicans, and Richard Burr fail us miserably by all their finger pointing and mud slinging.

North Carolina deserves better than Republican Senator Richard Burr.

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