We don’t win any more. Mexico and China are picking our pockets. And now, on top of all that, we’re poor.
That’s the latest assertion from – can you guess? – Donald Trump, who expanded on his view of Broken America in a recent interview with the Washington Post. “We were a very powerful, very wealthy country,” the leading Republican presidential contender said. “And we’re a poor country now. We’re a debtor nation. How are you going to get rid of $21 trillion in debt?”
Trump probably knows the accuracy of this claim doesn’t particularly matter, since his declinist narrative appeals to millions of real Americans who feel they’re falling behind, even if they’re not poor, exactly.
But if America is poor, the rest of the world is a Dickensian ghetto. “Trump is wrong,” says economist Donald Boudreaux of George Mason University. “This theme has been propounded for 25 years on both the left and the right, and been consistently debunked.” Here, for instance, are the latest figures on average disposable household income for the world’s most advanced economies, as of 2014:
China and Mexico aren’t included in this list, but if they were, they’d be far, far down. On a similar measure, gross national income per capita, the U.S. figure -- $55,200 -- is 6 times that of Mexico and 7 times that of China.
Trump worries about the United States short-changing its military, but U.S. defense spending is still twice that of China and Russia combined. NATO, which includes the U.S. and 26 allies, spends nearly $1 trillion per year on defense.
Many economists are uncomfortable with the size of national debt, now $19.2 trillion (not $21 trillion, as Trump seems to claim). The bloated debt clearly represents undisciplined spending by Congress, with a stamp of approval from the last two presidents. But it’s also a sign of the U.S. economy’s strength that investors everywhere in the world are willing to lend the United States almost unlimited sums of money at interest rates that today are around 1.9% for a 10-year bond. China pays 2.9% for the same type of bond; Mexico, 6%.
For all of Trump’s misleading bombast, though, it is arguably inaccurate to call America a rich country, either. A few charts explain why. First, here’s median U.S. household income, adjusted for inflation:
The purchasing power of the typical family is considerably below the peak level of 1999, which is why some people feel like they’re falling behind. There’s an important caveat, though: Many advanced nations are enduring the same backsliding, and the U.S. has actually fared better than most of them. We're falling behind -- a bit -- compared with where we used to be, but not compared with people in other countries.