I am wondering if the USA, as a whole, is more prosperous now that it
was in 2000.
We are told that the GDP has gone up every year. Population
growth has been modest. The published per-capita GDP has gone
up, from $33,000 to $46,000 (as of 1 January 2008). That
But we are running a deficit. The USA’s
balance was $ -738,600,000,000 in 2007. There has
been substantial href="http://scienceblogs.com/corpuscallosum/2008/06/national_infrastructure_protec.php">deterioration
in our infrastructure, which is a sort of depreciation.
The stock market has taken a beating. One blogger
(Ilargi, admittedly a doomer) has estimated that wealth in the USA is
being lost at a rate of href="http://theautomaticearth.blogspot.com/2008/08/debt-rattle-august-11-2008-10-million.html">ten
million dollars per minute.
Major banks have run up at least
hundred billion dollars in losses, just in the subprime part
of the housing bust. That is probably going to exceed one
trillion, likely much more. Plus, there is a href="http://calculatedrisk.blogspot.com/2008/08/subprime-and-alt-the-end-of-one-crisis.html">coming
crisis in alt-A mortgages. Even prime mortgages are href="http://money.cnn.com/2008/08/12/real_estate/prime_defaults_price_drops/index.htm?postversion=2008081206">going
NEW YORK (CNNMoney.com ) — Prime mortgages are
starting to default at disturbingly high rates – a development that
threatens to slow any potential housing recovery.
The delinquency rate for prime mortgages worth less than $417,000 was
2.44% in May, compared with 1.38% a year earlier, according to
LoanPerformance, a unit of First American (FAF, Fortune 500) CoreLogic
that compiles and analyzes residential mortgage statistics.
Delinquencies jumped even more for prime loans of more than $417,000,
so-called jumbo loans. They rose to 4.03% of outstanding loans in May,
compared with 1.11% a year earlier…
…Also last month, JP Morgan Chase (JPM, Fortune 500) CEO Jaime Dimon
called prime mortgage performance “terrible” and suggested that losses
connected to prime may triple…
The Afghanistan and Iraq wars are going to keep costing us serious
money, for many years to come.
Our goodwill around the world is in the tank. Hard to put a
price tag on that, but it is a consequential loss, with serious
Consumer spending has declined;
sales are down. href="http://www.washingtonpost.com/wp-dyn/content/article/2008/08/12/AR2008081202998.html">Eight
US banks have failed this year. Many more href="http://www.cnn.com/2008/LIVING/personal/02/27/bank.safety/index.html">are
“Regulators are bracing for 100-200 bank failures
over the next 12-24 months,” says Jaret Seiberg, an analyst with the
financial services firm, the Stanford Group.
Economists must have a way of putting a price tag on these increased
risks, although I don’t know what that method is. Similarly,
there is a cost to climate change, loss of species diversity, and other
environmental problems. I have no idea how big of a cost that
would translate to. Probably no one does. But it is
So if you take the supposed increase in wealth, and subtract all the
losses, the account deficit, depreciation of infrastructure, and
subtract some more for the increased financial risks, the loss of
goodwill, and the environmental damage, the the result positive, or
negative? Are we running the Yankee ingenuity machine as fast
as we can, only to be moving backward?