| STAT | European Union | United States | HISTORY |
|---|---|---|---|
| Central bank discount rate |
1.75%
Ranked 85th. 4 times more than United States |
0.5%
Ranked 122nd. |
|
| Distribution of family income > Gini index |
30.4
Ranked 15th. |
45
Ranked 9th. 48% more than European Union |
|
| Overview | Internally, the EU is attempting to lower trade barriers, adopt a common currency, and move toward convergence of living standards. Internationally, the EU aims to bolster Europe's trade position and its political and economic power. Because of the great differences in per capita income among member states (from $7,000 to $69,000) and historic national animosities, the EU faces difficulties in devising and enforcing common policies. For example, since 2003 Germany and France have flouted the member states' treaty obligation to prevent their national budgets from running more than a 3% deficit. In 2004 and 2007, the EU admitted 10 and two countries, respectively, that are, in general, less advanced technologically and economically than the other 15. Eleven established EU member states introduced the euro as their common currency on 1 January 1999 (Greece did so two years later), but the UK, Sweden, and Denmark chose not to participate. Of the 12 most recent member states, only Slovenia (1 January 2007) and Cyprus and Malta (1 January 2008) have adopted the euro; the remaining nine are legally required to adopt the currency upon meeting EU's fiscal and monetary convergence criteria. | The US has the largest and most technologically powerful economy in the world, with a per capita GDP of $49,800. In this market-oriented economy, private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace. US business firms enjoy greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, to lay off surplus workers, and to develop new products. At the same time, they face higher barriers to enter their rivals' home markets than foreign firms face entering US markets. US firms are at or near the forefront in technological advances, especially in computers and in medical, aerospace, and military equipment; their advantage has narrowed since the end of World War II. The onrush of technology largely explains the gradual development of a "two-tier labor market" in which those at the bottom lack the education and the professional/technical skills of those at the top and, more and more, fail to get comparable pay raises, health insurance coverage, and other benefits. Since 1975, practically all the gains in household income have gone to the top 20% of households. Since 1996, dividends and capital gains have grown faster than wages or any other category of after-tax income. Imported oil accounts for nearly 55% of US consumption. Crude oil prices doubled between 2001 and 2006, the year home prices peaked; higher gasoline prices ate into consumers' budgets and many individuals fell behind in their mortgage payments. Oil prices climbed another 50% between 2006 and 2008, and bank foreclosures more than doubled in the same period. Besides dampening the housing market, soaring oil prices caused a drop in the value of the dollar and a deterioration in the US merchandise trade deficit, which peaked at $840 billion in 2008. The sub-prime mortgage crisis, falling home prices, investment bank failures, tight credit, and the global economic downturn pushed the United States into a recession by mid-2008. GDP contracted until the third quarter of 2009, making this the deepest and longest downturn since the Great Depression. To help stabilize financial markets, in October 2008 the US Congress established a $700 billion Troubled Asset Relief Program (TARP). The government used some of these funds to purchase equity in US banks and industrial corporations, much of which had been returned to the government by early 2011. In January 2009 the US Congress passed and President Barack OBAMA signed a bill providing an additional $787 billion fiscal stimulus to be used over 10 years - two-thirds on additional spending and one-third on tax cuts - to create jobs and to help the economy recover. In 2010 and 2011, the federal budget deficit reached nearly 9% of GDP. In 2012 the federal government reduced the growth of spending and the deficit shrank to 7.6% of GDP. Wars in Iraq and Afghanistan required major shifts in national resources from civilian to military purposes and contributed to the growth of the budget deficit and public debt. Through 2011, the direct costs of the wars totaled nearly $900 billion, according to US government figures. US revenues from taxes and other sources are lower, as a percentage of GDP, than those of most other countries. In March 2010, President OBAMA signed into law the Patient Protection and Affordable Care Act, a health insurance reform that was designed to extend coverage to an additional 32 million American citizens by 2016, through private health insurance for the general population and Medicaid for the impoverished. Total spending on health care - public plus private - rose from 9.0% of GDP in 1980 to 17.9% in 2010. In July 2010, the president signed the DODD-FRANK Wall Street Reform and Consumer Protection Act, a law designed to promote financial stability by protecting consumers from financial abuses, ending taxpayer bailouts of financial firms, dealing with troubled banks that are "too big to fail," and improving accountability and transparency in the financial system - in particular, by requiring certain financial derivatives to be traded in markets that are subject to government regulation and oversight. In December 2012, the Federal Reserve Board announced plans to purchase $85 billion per month of mortgage-backed and Treasury securities in an effort to hold down long-term interest rates, and to keep short term rates near zero until unemployment drops to 6.5% from the December rate of 7.8%, or until inflation rises above 2.5%. Long-term problems include stagnation of wages for lower-income families, inadequate investment in deteriorating infrastructure, rapidly rising medical and pension costs of an aging population, energy shortages, and sizable current account and budget deficits - including significant budget shortages for state governments. |
|
| GDP |
$16.63 trillion
Ranked 1st. 6% more than United States |
$15.68 trillion
Ranked 2nd. |
|
| GDP > Composition by sector > Industry |
25%
Ranked 85th. 31% more than United States |
19.1%
Ranked 160th. |
|
| GDP > Per capita |
$29,423.40
per capita
Ranked 29th. |
$45,759.46
per capita
Ranked 8th. 56% more than European Union |
|
| GDP > Purchasing power parity |
$14.90 trillion
Ranked 1st. |
$16.24 trillion
Ranked 1st. 9% more than European Union |
|
| GDP > Purchasing power parity per capita |
$29,405.51
Ranked 28th. |
$47,587.30
Ranked 7th. 62% more than European Union |
|
| GDP per capita |
$32,676.48
Ranked 25th. |
$49,965.27
Ranked 10th. 53% more than European Union |
|
| GDP per person |
32,838.17
Ranked 24th. |
45,989.18
Ranked 9th. 40% more than European Union |
|
| Inbound tourism income > Current US$ |
$463.27 billion
Ranked 1st. 3 times more than United States |
$166.53 billion
Ranked 2nd. |
|
| Inflation rate > Consumer prices |
1.8%
Ranked 121st. |
2.1%
Ranked 160th. 17% more than European Union |
|
| Tax > Tax rates |
35.43
Ranked 28th. 2 times more than United States |
15.91
Ranked 3rd. |
|
| Tourist arrivals |
371.04 million
Ranked 1st. 6 times more than United States |
57.94 million
Ranked 3rd. |
|
| Tourist arrivals > Per capita |
755.65
per 1,000 people
Ranked 39th. 4 times more than United States |
190.7
per 1,000 people
Ranked 91st. |
|
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