Tuesday, February 15, 2011

The unaffordability of the safety hammock

Maybe some of the much better econo bloggers could make this point (and make it better than I) but one thing I can never get past in these endless discussions of our lavish unaffordable growth choking Western safety nets is expressed in this chart comparing (just for example), GDP per capita from 1960 and 2008 in several wealthy western countries (inflation adjusted to 2005 and converted to PPP dollars):

Data taken from page 13 of this BLS report.  If you do the math, you find that between 1960 and 2008, GDP per capita went up 276% in the US, 277% in Canada, 277% in the UK and 287% in Germany (which is really impressive given that West Germany absorbed a fairly large moribund, poorer neighbour named East Germany in 1990).

Inescapable point here being that we're all a lot richer as collective societies and while there are other variables that have some impact on the grand question of "how much social mooching we can afford" the basic fact that we're all things considered almost 3 times as wealthy as we were in the heyday of liberal social intervention should at least get mentioned once in awhile somewhere in the debate about how many poor people should freeze to death next winter and how many poor women should deliver babies suffering foetal malnutrition so that this party can go on without disruption.

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