Tuesday, October 18, 2011

America's Ridiculously Large $15 Trillion Economy

Which Countries Match the GDP of U.S. Metro Areas?
RankU.S. Metropolitan
Area GDP, 2010
MillionsEquivalent Country by GDP, 2010
1New York City$1,280,517Australia
2Los Angeles-Long Beach$735,743Turkey
3Chicago$532,331Switzerland
4Washington, D.C.$425,167Taiwan
5Houston$384,603Austria
6Dallas-Fort Worth$374,081Argentina
7Philadelphia$346,932South Africa
8San Francisco-Oakland$325,927Thailand
9Boston$313,690Denmark
10Atlanta$272,362Colombia
11Miami-Fort Lauderdale$257,560Finland
12Seattle-Tacoma-Bellevue$231,221Portugal
13Minneapolis-St. Paul$199,596Chile
14Detroit$197,773Phillipines
15Phoenix$190,601Czech Republic
16San Diego$171,568Pakistan
17San Jose$168,517Romania
18Denver$157,567Peru
19Baltimore$144,789New Zealand
20St. Louis$129,734Kuwait

The Bureau of Economic Analysis recently released GDP by U.S. metropolitan area for 2010, and the top 20 largest metro areas are displayed above along with the equivalent countries that have economies that are approximately the same size as U.S. metro areas.  Pretty amazing, and a testament to the enormity of the U.S. economy and the productivity of American workers. 

Related: Map from The Economist comparing the 2009 economic output of American states to the economic output (GDP) of entire countries.

64 Comments:

At 10/18/2011 5:50 PM, Blogger Marko said...

I heard someone on the radio saying that if you took all of the "poor" (under poverty line?) of the U.S. and put them together as as a country, that they would be the worlds 8th largest economy. Has anyone seen anything like that?

I guess if you include government transfer payments to the poor, the group would indeed be wealthy compared to many countries.

I wish we could edit posts, sorry I had to delete the above to make my post make sense.

 
At 10/18/2011 5:58 PM, Blogger ememes12 said...

what are the population differences between these city's and country's

 
At 10/18/2011 6:21 PM, Blogger truth or consequences said...

"Pretty amazing, and a testament to the enormity of the U.S. economy and the productivity of American workers."

While the US economy is certainly ENORMOUS before engaging in any more backslapping about the productivity of the American workers a closer look at those numbers would be wise....

NY/NJ equal to Australia???? So??? NY/NJ population 27M, Oz pop. 22M

Boston equal to Denmark?? Again so??? Greater Boston pop. 4.5M, Denmark 5M

What was that point again you were making again??? That the US is a BIG place maybe....with LOTS of people living there???? You betcha!;)

 
At 10/18/2011 6:25 PM, Blogger sethstorm said...


I guess if you include government transfer payments to the poor, the group would indeed be wealthy compared to many countries.

Comparing them to other countries is flawed. It is another country-level government with its own economic and political situations that are not our own; nor can US citizens affect those other nations in their separate political/electoral process.

Trying to invalidate the concerns by skewing the graph doesn't make the issues go away.

 
At 10/18/2011 6:39 PM, Blogger truth or consequences said...

a small correction to my earlier post...."greater NY" is actually 18.5M....so fewer people than kangaroo land....but still, throw in the NY "financial" sector there and the two places are pretty close to equal....

And BTW...is comparing US to cities to "second world" countries really "fair"??? Phoenix has 1.5M population, Checq Republic has 10M....but man, it's only been "around" for 20 odd years...not 200+. "Rome wasn't built in a day".

 
At 10/18/2011 7:06 PM, Blogger Larry G said...

Detroit has a bigger economy than the Philippines or Pakistan or New Zealand?

ZOUNDS!

 
At 10/18/2011 8:09 PM, Blogger aorod said...

Over the last 50 years, the price of most consumer goods and services have fallen due to increasing worker productivity and more efficient manufacturing processes. All but education and health care, which also happen to be the most subsidized by government. Tells you something doesn't it?

 
At 10/18/2011 8:19 PM, Blogger Larry G said...

"... All but education and health care, which also happen to be the most subsidized by government. Tells you something doesn't it?"

only in this country through...

health care is govt run and costs 1/2 as much in all other industrialized countries.

on education - other countries spend less than us but they outperform us - 20 other countries have govt-specified national curriculums, spend less than we do and put us in 21st place.

 
At 10/18/2011 8:33 PM, Blogger mike k said...

NY/NJ equal to Australia???? So??? NY/NJ population 27M, Oz pop. 22M

What is the geographic size of Australia compared to the NY/NJ metro area?

What comparative advantages does OZ have over this area in natural resources?

I think you missed the point.

Not surprising.

 
At 10/18/2011 8:36 PM, Blogger mike k said...

And BTW...is comparing US to cities to "second world" countries really "fair"??? Phoenix has 1.5M population, Checq Republic has 10M....but man, it's only been "around" for 20 odd years...not 200+. "Rome wasn't built in a day".

Czech Republic only 20 years?

I'm still rolling on the floor...LOL

 
At 10/18/2011 9:46 PM, Blogger westexas said...

An excerpt from an essay I wrote in April, 2007:

http://www.graphoilogy.com/2007/04/elp-plan-economize-localize-produce.html

The ELP Plan: Economize; Localize & Produce

Author Thom Hartmann, in his book, “The Last Hours of Ancient Sunlight,” described a high tech company that he consulted for that went through several rounds of start up financing, and then collapsed, without ever delivering a real product. At the peak of their activity, they had several employees and lavish office space--until they ran out of capital. His point was that this company was analogous to a large portion of the US economy, which has the appearance of considerable activity and uses vast amounts of energy, but how much of this economic activity delivers essential goods and services?

I have read, and it seems reasonable, that the majority of Americans live off the discretionary income of other Americans. We are therefore facing a wrenching transformation of the US economy--from an economy focused on meeting “wants” to an economy focused on meeting needs--and the jobs of a vast number of Americans are thereby directly threatened in a post-Peak Oil environment.

 
At 10/18/2011 10:05 PM, Blogger arbitrage789 said...

"America's Ridiculously Large $15 Trillion Economy"

And a debt to match.

Dwarfed only by the size of the unfunded liabilities.

 
At 10/18/2011 11:58 PM, Blogger truth or consequences said...

Hey, Mike K.....about the Czech Republic...

from 68 to 89 the place was occupied by the Soviet Army...please don't tell me you're going to start doing economic comparisons between the US and Iraq next

"On 1 January 1993, Czechoslovakia peacefully dissolved into its constituent states, the Czech Republic and the Slovak Republic.

The Czech Republic is the first former member of the Comecon to achieve the status of a developed country according to the World Bank. In addition, the country has the highest human development in Central and Eastern Europe, ranking as a "Very High Human Development" nation. It is also ranked as the third most peaceful country in Europe and most democratic and healthy (by infant mortality) country in the region."

Ok so I was wrong...it's not 20 years...it's 18. You can get off the floor now. "Learn something new every day and no day is wasted"

 
At 10/19/2011 12:37 AM, Blogger Ron H. said...

wedtexas: "We are therefore facing a wrenching transformation of the US economy--from an economy focused on meeting “wants” to an economy focused on meeting needs--"

How can anyone tell the difference between a need and a want, and who should decide which is which for us?

 
At 10/19/2011 6:03 AM, Blogger mike k said...

Ok so I was wrong...it's not 20 years...it's 18. You can get off the floor now. "Learn something new every day and no day is wasted"

Once again, you miss the point...I'm shocked.

You mean there was nothing there prior to 18 years ago. That Soviet occupation you speak of was supposed to be a workers utopia, no? How did that work out, not just in the Czech republic, but in the Soviet Union itself?

"Learn something new everyday and no day is wasted"

 
At 10/19/2011 6:09 AM, Blogger westexas said...

Ron H.

Does a family of four need a 5,000 square foot home, with three SUV's, in the suburbs at some distance from their jobs?

Or could they live quite well in a 1,500 square foot energy efficient house, along a mass transit line, with one small vehicle?

My view is that for most Americans, our auto centric suburban lifestyle is dead, but most of us don't know it yet, and we only see what we want to see (much like the ghosts in the movie "The Sixth Sense.").

The reason is simple. While we are seeing a very slow rate of increase in total US crude oil production, we are being shut out of the global export market for crude oil at a much faster rate, as developing countries consume an increasing share of a declining volume of Global Net Exports.

 
At 10/19/2011 7:15 AM, Blogger westexas said...

Some numbers for Global Net Exports (GNE) and for Available Net Exports (ANE).

GNE = Total net oil exports from top 33 net oil exporters in 2005, total petroleum liquids, BP + Minor EIA data

ANE = GNE less the Chindia region's combined net oi imports.

GNE fell at an average volumetric rate of about 600,000 bpd per year from 2005 to 2010; from 2010 to 2020, I suspect that the GNE volumetric decline rate will be between 600,000 bpd and 1,000,000 bpd per year.

ANE fell at an average volumetric rate of about 1,000,000 bpd per year from 2005 to 2010; from 2010 to 2020, I suspect that the ANE volumetric decline rate will be between 1,000,000 bpd and 2,000,000 bpd year.

Or let me put it this way, the five year decline in ANE, which is the volume of exported oil available to importers other than China & India, was equivalent to total US crude oil production in 2008.

The reality that the is US facing, i.e., what the 2005 to 2010 numbers show, is that a slow rate of increase in US domestic production is not coming close to offsetting the decline in ANE.

In other words, we are being shut out of the global market for exported oil faster than our slow rate of increase in US crude oil production (average US crude oil production rate in 2010 was 5.5 mbpd; average for 2011 through September, 2011 was 5.6 mbpd).

Incidentally, "Charles Mackay," on The Oil Drum, studies short term inventory and export data, and he has some interesting comments about what is currently going in on global markets and in the US:

http://www.theoildrum.com/node/8500#comment-844402

If the US had not released some oil from the SPR, I suspect that we might be down to a couple of days supply of crude oil inventories in excess of MOL (Minimum Operating Level). I have heard that light/sweet oil supplies are very tight in the Atlantic Basin, and I think that there is a good chance that we will see another release of emergency oil supplies by IEA countries, as we head into the Northern Hemisphere winter.

 
At 10/19/2011 7:44 AM, Blogger Zachriel said...

The biggest problem with the list is comparing highly-developed urban centers with countries, including their less productive rural sectors. It's still interesting to look at, but without population numbers, it's hard to tell what's really happening.

Mark J. Perry: Pretty amazing, and a testament to the enormity of the U.S. economy and the productivity of American workers.

To support the latter statement, you would want GDP per capita, and then only for comparable sectors of the country. For instance, in terms of GDP per capita, Denmark compares favorably to Boston, but Dallas-Fort Worth far surpasses Argentina. Still, a fairer comparison would be Dallas to Buenos Aires, GDP per capita of $58k to $28k respectively.

aorod: All but education and health care, which also happen to be the most subsidized by government.

Most sectors of the economy have yielded to industrialization and modernization. Medicine and education still require a hands-on approach. As productivity in other fields increase, overall labor costs rise. Hence, medicine and education will continue to rise, even without accounting for the technological advances in medicine.

 
At 10/19/2011 8:35 AM, Blogger morganovich said...

marko-

that's just a silly definitional game.

those under the poverty line in the US would be called "rich" in most countries.

it's also nothing like true.

taking our bottom 20% and comparing them to the rest of the world would still make them a rich country.

our poorest 5% would be the richest 5% of india.

http://mjperry.blogspot.com/2011/01/americas-poor-indias-richest.html

our bottom 5% are richer than 68% of the world. our bottom 20% are richer than 85%.

that whole argument is just statistical silly buggers.

there are NO poor in the US in comparison to most counties. if you travel to cairo or haiti or brazil or china or india, you can see serious poverty. once you do, you would realize that it simply does not exist here in any real way.

 
At 10/19/2011 8:45 AM, Blogger morganovich said...

larry-

"health care is govt run and costs 1/2 as much in all other industrialized countries."

nope.

on a procedure for procedure basis, it does not cost half as much. it's pretty comparable in terms of all in cost.

the difference is how much more we consume and how many more procedures we can get that they cannot.

try getting an ankle replacement in canada or france when you are 70.

not gonna happen.

saying that spending less as a % of gdp is "half the cost" proves nothing.

it could be because they get less care.

quality of life stuff like a hip replacement is very expensive, and impossible to measure in simple outcome aggregates.

 
At 10/19/2011 8:48 AM, Blogger Che is dead said...

(AP) American workers stay longer in the office, at the factory or on the farm than their counterparts in Europe and most other rich nations, and they produce more per person over the year. They also get more done per hour than everyone but the Norwegians, according to a U.N. report released Monday, which said the United States "leads the world in labor productivity." Each U.S. worker produces $63,885 of wealth per year, more than their counterparts in all other countries, the International Labor Organization said in its report. Ireland comes in second at $55,986, ahead of Luxembourg, $55,641; Belgium, $55,235; and France, $54,609 ... Norway, which is not an EU member, generates the most output per working hour, $37.99, a figure inflated by the country's billions of dollars in oil exports and high prices for goods at home. -- U.S. Workers World's Most Productive, CBS

 
At 10/19/2011 8:53 AM, Blogger Jet Beagle said...

Contrary to Zachriel's argument, the only sensible way to compare GDP per capita is at the national level. Furthermore, such comparisons should not include very small nation cities such as Singapore and the principality of Monaco, which have very little if any low-skilled agriculture and mining industries.

Here's some GDP per capita figures (PPP) which clearly show that among large nations, the U.S. economy still generates more value:

United States - $46,860
China - $7,544
Canada - $39,171
Russia - $15,612
Japan - $33,885
Germany - $36,081
France - $33,910
UK - $35.059
Italy - $29,480
India - $3,408

Among the larger nations, the U.S. still has the highest standard of living. As a result of all our wealth, we are able to spend far more for health services and for old age pensions than do other nations. Some point to those expenditures as negatives. I see it very differently. This is still the best place in the world to be old or to be ill.

 
At 10/19/2011 9:05 AM, Blogger Larry G said...

@morg

we'll never agree but I don't mind going back and forth with you as long as we can refrain from "moron" and similar (which you seldom do).

in this country and other countries with UHC - you are free to pay for therapies and services that the govt will not pay for.

UHC does not mean you get any/every therapy that you desire.

you basically get what the govt can afford balanced with the payroll taxes collected.

they have to keep the system balanced if it is be sustainable.

the difference is that there are some therapies and services that are available to ANYONE under UHC but not available to ANYONE under our system.

and because all people under UHC received some minimal level of care - their over survival is higher.

people in our system who don't care timely care - incur advanced diseases that are more expensive to treat and still do not survive as well as they might with regular screening and care,

but I keep asking - for those who feel that govt-care - whether UHC in other countries or uninsured care via EMTALA/MedicAid in this country -

can we find a country where there is no govt involved in health care and compare it to countries that do have govt health care in terms of costs and outcomes?

I do not see any countries that have no govt involvement that would be comparable to the industrialized countries including us but i'm willing to listen to those who would make that case.

surely there must be at least SOME countries that do not have govt involved in health care - and as a direct result - health care competitive in a free market and cheaper and better.

 
At 10/19/2011 9:11 AM, Blogger truth or consequences said...

Mike k.....exactly!

you said: "That Soviet occupation you speak of was supposed to be a workers utopia, no? How did that work out, not just in the Czech republic, but in the Soviet Union itself?"

my original point was that apart from the "feel good" factor, comparing the US to countries that were occupied by a foreign army for twenty years and have only been a "free market democracy" (if I can use that term) for the last 18 is meaningless and CERTAINLY does not yield ANY information as to the relative productivity of the american worker...as was suggested.

Iraq's been around for thousands of years. Are you going to compare the productivity of Iraqi/US workers next?? I guess/hope not.

Compare to France, Japan, UK, Oz, Canada even??? sure, go ahead....but to the "second world"??? That's just "feel good" stuff. But hey, if that's what you're into....

 
At 10/19/2011 10:03 AM, Blogger Zachriel said...

morganovich: try getting an ankle replacement in canada or france when you are 70. not gonna happen.

Not sure where you get your information, but France does ankle replacements for anyone who is in reasonably good health (to sustain the trauma from surgery and having a plausible benefit), with a mean age of 56.4 years, ranging from 17 to 84 years.

Besse et al., Total ankle arthroplasty in France, Orthopaedics & Traumatology-surgery & Research 2010.

Zachriel: To support the latter statement, you would want GDP per capita, and then only for comparable sectors of the country.

Jet Beagle: Contrary to Zachriel's argument, the only sensible way to compare GDP per capita is at the national level.

Comparing at the national level is not the only "sensible way," though it is *a* sensible way.

Jet Beagle: Here's some GDP per capita figures (PPP) which clearly show that among large nations, the U.S. economy still generates more value:

Yes, the U.S. leads in GDP per capita (PPP) among developed countries (excepting Norway), though many other developed countries are comparable.

 
At 10/19/2011 10:20 AM, Blogger morganovich said...

larry-

"you basically get what the govt can afford balanced with the payroll taxes collected."

not true in many cases, like canada.

also: all these systems are failing. they are deep in the red and getting worse by the year.

this:

"can we find a country where there is no govt involved in health care and compare it to countries that do have govt health care in terms of costs and outcomes?

I do not see any countries that have no govt involvement that would be comparable to the industrialized countries including us but i'm willing to listen to those who would make that case."

is a non sequitor.

we can look at every other kind of market and see what happens.

countries where the feds do not price food tend to do better, countries like venezeula where they start get famines.

you are essentially arguing that because it has not been tried, it cannot work.

one could have made the same argument about socialized care in 1920.

you are essentially making the argument that socialized markets work better than free ones, something that has been disproven over and over in about a million places.

what is it that makes healthcare special in your mind?

there is ZERO question that introducing a price signal drops costs and results in better consumption choices.

you can see that even in the US where cash pay procedures drop in price while those that are insured soar.

compare lasik to MRIs for an excellent example.

if you want to see a health plan getting excellent results and satisfaction, look at whole foods, that went to an HSA plan, saved money, and got better results.

that would be magnified enormously if the whole nation went that way.

providers would compete on price, and users allocate spending toward what mattered.

there is no other way to achieve that. no list of available care, however carefully constructed can do that.

 
At 10/19/2011 10:23 AM, Blogger morganovich said...

zach-

i got it from my great uncle and aunt, who, living in france, were unable to get anything like that sort of care and spent their 60's-80's with canes as a result. they were denied care due to age.

contrast that to my mother, who got state of the art ankle surgery at 70 from the best clinic in the US (through medicare) and it's pretty stark.

alternately try looking at cancer survival rates and you'll see how poorly the EU performs relative to the US.

men in the US has a 50% greater survival rate.

that's a staggering number.

it's also expensive.

that's the trade off.

 
At 10/19/2011 11:15 AM, Blogger Larry G said...

re:

" all these systems are failing. they are deep in the red and getting worse by the year."

then

" countries where the feds do not price food tend to do better, countries like venezeula where they start get famines.

you are essentially arguing that because it has not been tried, it cannot work."

actually not - I'm accepting your premise and asking for countries that are moving away from the failing systems and what kinds of systems are showing some promise...

I'm asking you to point to at least some non-govt systems ...because we know there are countries with very little govt involvement and, in theory at least, the private sector does what you are advocating....

so I'm asking you to name a few that do not have govt but do have private sector systems.

 
At 10/19/2011 11:22 AM, Blogger truth or consequences said...

Morganovich.....

interesting that you would pick ankle replacement as an example as it has the highest failure rate of any joint replacement and is a very "last resort" option.

The Canadian orthopedic association's guidelines for consideration are, non smokers, no overweight people and nobody under the age of 65 (so much for "good luck in getting one over 70 in Canada)

I suppose when your great uncle tried to get a replacement and how much did he weigh would be pertinent information.....

Anyway, we could talk all day about specific cases ad infinatum...

Your post was very interesting....leads me to beleive that there are really three examples we are constantly comparing here and often we mix 'em up...

"Socialized medecine" (the great satan;);););))...the government hires doctors and runs hospitals, screens patients (a la UK)

"Socialized insurance" (a la Canada)the government pays the bills, doctors are independent contractors, hospitals are run by non-profit societies, doctors screen patients and make all treatment decisions. Government, holding the purse strings, has the ability to "throttle" access.

"Half and half" (a la US) Private insurance providers, for profit hospitals, doctors working for corporations of self employed. Insurance "adjusters" make cost/ benefit analyses and check coverage when it comes to who gets what treatment. 50% of the time, when the government picks up the tab (your mother) the care providers are basically handed a blank check.

"Private healthcare"...only exists in Utopia (a small country in eastern Europe) ;););););)

How am I doing???? Regards, F

 
At 10/19/2011 11:24 AM, Blogger morganovich said...

and i have given you several.

the US market for elective procedures has declining prices. the same is true of the cash pay medical tourism industries in many other countries.

costs stay low when you spend cash, and you buy what makes sense as opposed to pigging out at the buffet.

the whole foods plan is another good example.

it's clear that an all you can eat system results in massive cost spirals, or, if you hold prices down/control supply, in rationing and long wait lists.

look at it from the other direction:

imagine running food stamps like medicare. what do you think would happen to the grocery bills of those covered if they could go to the store, pay a $20 copay, and buy whatever food they wanted?

 
At 10/19/2011 11:26 AM, Blogger truth or consequences said...

ooops, shoudda been... Regards, TC

 
At 10/19/2011 11:27 AM, Blogger Jim said...

Most European countries are small states.

Why do researchers compare USA to these countries? Size, diversity, and therefore complexity make comparisons futile.

It is like comparing Aunt Alice's BBQ with 3 part time workers with GM.

 
At 10/19/2011 11:41 AM, Blogger morganovich said...

truth-

i'm not quite sure what to make of your response.

that's not really how i would frame it, though i do agree with some of your critiques of the various types of systems.

to my mind, it's a very simple analysis.

you either believe that free markets are the best allocators of goods and services or you don't.

if you do, then it seems to follow that messing with the price signal through medical and insurance rules etc will lead to poor allocation and, in general, overconsumption and price inflation.

look what happened to housing prices under federal subsidies and how well that worked out.

to my mind, moving to all cash pay will drop prices enormously (as evidenced in the existing cash pay market). this allows either more care for the same money, less money for the same care, or some mix of the two, but in any case pushed the consumption possibility frontier upward.

that is why i favor turning all healthcare grants into cash, not buffet style insurance and to completely freeing up insurers and employers to prices and feature plans as they makes sense.

such a system would move many toward HSA's and high deductible disaster insurance.

the problem with health "insurance" is that it is not insurance at all. auto insurance does not cover a new engine if you over rev yours.

if one is to go the other way, and dent that free markets allocate resources best (note: not perfectly, but better than any other option), well, that seems to place a large burden of proof on the proposer.

federal control of/interference in most markets has led to disaster after disaster to the detriment of aggregate wealth and quality of life.

i am unaware of any planned economy that has ever worked for more than a few years and of dozens that failed horrifically.

this leads me to question assertions that somehow healthcare is different and needs to be socialized.

notions that it is a "right" strike me as outlandish. you cannot have a right that requires others to do things for you. that is akin to enslaving them. essentially, if you cannot have it alone on a desert island, it's not a right.

a right to healthcare is really no different than claiming a right to free beer. someone else has to make it and give it to you. either you conscript their labor and goods without their consent, or, you take from others without their consent to pay for it. in either case, you are taking away their property/liberty to serve your "right". you cannot have a right to violate the rights of others. this makes a right to healthcare incompatible with rights to self determination and property and thus only possible in under tyranny, in which case, it's not really much of a right.

does that help?

 
At 10/19/2011 11:43 AM, Blogger The King said...

The countries of the world do not like these comparisons. Looking @ the GDP of a state (like CA) or size for that matter makes most countries leaders little more than mayors or governors! And, on a per capita basis almost any state's population is more productive than any country!

 
At 10/19/2011 11:51 AM, Blogger morganovich said...

tc-

also: regarding ankle surgery:

that was once true. it is no longer the case. there are a few centers in the US with very, very high success rates, notably oakland where my mother was treated.

this is due to some new technology for creating an artificial joint.

you will not find that technology in any other country and i know, because we looked into it exhaustively.

socialized medicine is always slow to adopt new procedures and even slower to develop them.

that's one of the reasons that the vast preponderance of medical advances worldwide come from the US.

it's also one of the reasons we wind up paying more. we get access to the new and expensive and we are also covering the development costs. the rest of the world gets a free ride on that.

 
At 10/19/2011 12:24 PM, Blogger Larry G said...

re: "....pay a $20 copay, and buy whatever food they wanted?"

well.. it's a 20% co-pay and a 100% co-pay for dental and optical.

re: "..you either believe that free markets are the best allocators of goods and services or you don't."

education and medical care are two areas where markets "work" in terms of "markets" but they don't fulfill the goals.

If we did not have mandatory education - and parents decided they could save money by not sending their kids to school - what would happen?

There are countries that don't have public schools.

Obviously - there are "issues" with govt-funded, govt-directed education with some countries but other countries with govt-funded and govt-funded education are not only efficient and cost-effective but they rank in the top tier of academic achievement.

would you get that result from a private market only education system?

how would urban areas "work" with "voluntary" free-market fire, water/sewer, security services?

there are some things that govt must do or else everyone can be adversely affected.

and no disagreement here about how wasteful and bureaucratic govt can be.

but the alternative is to have an urban area like Mogadishu where filth, disease and crime are rampant....

try to get a cheap MRI or ankle replacement in Mogadishu.....

things you take for granted - like expecting the MRI not to pulverize your organs or not to have your ankle amputated when things go awry are not at all guaranteed.

 
At 10/19/2011 12:32 PM, Blogger Hydra said...

HSAs will never wrok because they do not spead the ridsk of high cost catastrophic events,

This idea is laughable when you realize how little most people are even able to save in their 401k or other retirement accounts.

I cannot believe you promote this at a time when much of the poulace is in a negaive net worth situation due the the housing situation,

 
At 10/19/2011 12:34 PM, Blogger Hydra said...

I don't see the point fo this post, either.

OK, we are big. And productive.
What is so great about that, and what is wrong with less work and more vacation?

 
At 10/19/2011 1:03 PM, Blogger morganovich said...

"well.. it's a 20% co-pay and a 100% co-pay for dental and optical."

taking 80% off the price of a good or service leads to MASSIVE overconsumption.

it's also not true of medicaid, which is why medicaid recipients use the ER at more than twice the rate of the privately insured.

it's also not true on most other countries.

your education example is interesting. our system is expensive and mediocre. more to vouchers, and it improves massively. you need to introduce competition and a price signal. vouchers instead of medicare would work the same way. i think you just disproved your own argument.

btw, fire is another great example of a market where private contractors do the job better and cheaper. many municipalities use private services and save money doing it.

police are a special case as allowing a private company to take your freedom away is pretty fraught.

but it's also not a market. it's a basic function of government. police exist to safeguard rights and are necessary for such.

and this: "things you take for granted - like expecting the MRI not to pulverize your organs or not to have your ankle amputated when things go awry are not at all guaranteed."

is just foolish. there is no guarantee that your toaster won't explode either. yet the free market handles it. that's what reputation and liability laws are for.

FWIW, it's quite possible to buy quality health care in mogadishu. most there cannot afford it, but that's the fault of a failed state, not the medical system.

 
At 10/19/2011 1:07 PM, Blogger morganovich said...

hydra-

your point on HSA'a leaves out the obvious fact that you can still buy insurance either with your own cash or HSA money.

most HSA provide catastrophe insurance.

the difference is that it has a high deductible and or requires you to spend your HSA money first, giving you real skin in the game.

that allows it to act like real insurance, coverage for unlikely events, as opposed to being an entitlement.

if your car insurance worked like your health insurance and covered tires that wear out, tune ups, tears to the interior, oil changes, or gas tanks you filled with sand, imagine what it would cost.

insurance for catastrophe is easier to price and does not cause inflationary spirals.

 
At 10/19/2011 1:08 PM, Blogger Zachriel said...

This comment has been removed by the author.

 
At 10/19/2011 1:13 PM, Blogger Zachriel said...

morganovich: i got it from my great uncle and aunt, who, living in france, were unable to get anything like that sort of care and spent their 60's-80's with canes as a result. they were denied care due to age.

We provided a recent study wthich shows that such procedures certainly are done. Meanwhile, there are many people in the U.S. who do not receive such care because they can't afford it.

morganovich: alternately try looking at cancer survival rates and you'll see how poorly the EU performs relative to the US.

Such claims are generally exaggerated. If you look at prostate cancer, for instance, the measured U.S. survival rate is higher because they diagnose and treat cancers that often don't warrant treatment. The result is a reduced quality of life (incontinence, impotence). It shows a higher survival rate because slow growing tumors are often not diagnosed and the patient dies of other causes before the prostate cancer becomes a problem.

If you look at overall life spans, and quality of life, most developed countries are very comparable.

morganovich: this is due to some new technology for creating an artificial joint.

Are you thinking of the STAR Ankle system, such as used by Jeffrey Mann of Oakland?

 
At 10/19/2011 1:16 PM, Blogger Larry G said...

" taking 80% off the price of a good or service leads to MASSIVE overconsumption."

not in countries where there is UHC.

In fact, it's such restrictions that are pointed out as "proof" that UHC "does not work".

You can't have it both ways.

If you are going to provide universal access - for a price - then you have to restrict access to keep the programs solvent.

You said UHC in Europe is "failing" but compared to American HC their systems have been in place for 50,60, 80 years and are still plugging along with about 1/2 per capita HC costs as us.

the most cost-effective system - in the world - that provides UHC is govt-run - Singapore -which has

1. mandatory payroll taxes - 30%

2. mandatory subsidized catastrophic insurance

3. mandatory price controls

4. and they strictly control what the money in their personal HSAs can be spent on - and how much.

I do not see any non-govt system in the world that works as well as Singapore's system or for that matter as well as all the countries that have UHC.

I keep asking for a list of countries that at least challenge the govt-run countries on access and cost and to date - no one has supplied even one country .. other than Singapore... which is about as govt-run as a country could be.

 
At 10/19/2011 1:26 PM, Blogger Jon said...

High GDP can mask a lot of suffering if inequality is high. Inequality in the US is on the order of Uruguay, Argentina, and China. Better than Nambia and South Africa, but worse than Egypt, Indonesia, and Pakistan.

What Europe is able to do is gain on the US in terms of GDP/capita and do it while producing much less inequality. A recent report from the IMF notices this and concludes that high levels of inequality are bad for economic growth.

Following WWII the US had half the world's wealth and only 6% of the world's population. So it is it any surprise that we are the largest economy in the world still? We are but we're also losing ground. The real scandal is that we can have such a high GDP/capita and still have such awful performance in terms of the various social indicators of health, crime, and educational performance.

 
At 10/19/2011 1:30 PM, Blogger truth or consequences said...

Morganovich......

I like you beer thing;)...but if there was "beer insurance" it's not like you suggest... that someone will make/pay for it and somebody ELSE will drink it.....more like everybody will probably drink beer sooner or later, everybody pays the same for insurance, some will consume more than others....and those that thought (maybe) were going to consume more in the future (but don't in the end) have insured themselves against the potential/expected higher cost...

I'm almost tempted to agree with you that pure market forces (NO government involvement at all) would produce better price/availability outcomes.....but really, do you see that EVER happenning??? Not bloody likely....or are you moving to "Utopia" soon?;);););)

so unless we want to continue this exercise stricly as a "lab experiment" beating the "privatize everything and it's every man out for himself" drum...we are not getting any closer to reaching some sort of happy medium that might work for most people/countries

as to your "free ride" comment...I said before that when you spend so much money, operating on so many people, you are bound to come up with some discoveries...that eventually go around the globe. So?

Surely you cannot be suggesting that other countries should write the US ("the richest country in the world") a cheque every year.

I hope it is sufficient enough to know that the rest of the world is grateful to the US for spending so much money on healthcare...that produces better ways of doing stuff...like operations. How's that? Cheers, TC

 
At 10/19/2011 1:55 PM, Blogger Larry G said...

"btw, fire is another great example of a market where private contractors do the job better and cheaper. many municipalities use private services and save money doing it."

but if someone does not pay for fire service and their house catches on fire - what happens to the houses next door?

does the fire dept just keep the hoses trained on the adjacent homes that have fire service?

I think you can see that this is not workable.... except in isolated areas but certainly not in subdivisions and urban areas.

"police are a special case as allowing a private company to take your freedom away is pretty fraught."

are you equating "police" with "security"?

would you agree that in a free market that every person is responsible for their own security?

the richer you are - the better your security?

if you are poor - you have no security...

isn't that the free market?

are you REALLY making a SPECIAL CASE here?

if you make such an exception for police.. then why not for education and health care?

don't we get to the point where your idea of the free market has exceptions.... and others ideas of free markets have exceptions...

and those exceptions can be different?

you want police.

they want health care

 
At 10/19/2011 2:05 PM, Blogger Zachriel said...

morganovich: btw, fire is another great example of a market where private contractors do the job better and cheaper.

Marcus Licinius Crassus started the first private Roman fire brigade.

"One of his most lucrative schemes took advantage of the fact that Rome had no fire department. Crassus filled this void by creating his own brigade—500 men strong—which rushed to burning buildings at the first cry of alarm. Upon arriving at the scene, however, the fire fighters did nothing while their employer bargained over the price of their services with the distressed property owner. If Crassus could not negotiate a satisfactory price, his men simply let the structure burn to the ground, after which he offered to purchase it for a fraction of its value."

 
At 10/19/2011 2:41 PM, Blogger Ron H. said...

westexas: "Does a family of four need a 5,000 square foot home, with three SUV's, in the suburbs at some distance from their jobs?

Or could they live quite well in a 1,500 square foot energy efficient house, along a mass transit line, with one small vehicle?
"

Well, unlike you, I don't pretend to know what others need. They can and will decide that for themselves.

"My view is that for most Americans... "

Your fascist view, that you know what is best for others is extremely dangerous to individual liberty. Thank goodness you have little ability to put it into force.

You might consider tending to your own affairs and allowing others to do the same.

 
At 10/19/2011 4:03 PM, Blogger Ron H. said...

"HSAs will never wrok because they do not spead the ridsk of high cost catastrophic events,"

You need to read more carefully. Check out the "health plan" whole foods provides for employees.

"This idea is laughable when you realize how little most people are even able to save in their 401k or other retirement accounts."

Yes. Ho Ho Ho. People make choices, and set priorities, right?

"I cannot believe you promote this at a time when much of the poulace is in a negaive net worth situation due the the housing situation,"

What better time to implement a plan that would be cheaper? Get your head out.

 
At 10/19/2011 4:15 PM, Blogger Ron H. said...

"OK, we are big. And productive.
What is so great about that, and what is wrong with less work and more vacation?
"

Nothing! Less work and more vacation sounds great.

What's your point?

Oh. Those other things you want? Perhaps less vacation and more work would allow you to have them. Priorities. Choices.

 
At 10/19/2011 4:41 PM, Blogger Ron H. said...

Jon

From your r3eference:

"But sustained, long-term economic growth, of the sort that the United States and Britain enjoyed after World War II, is rare."

Well, we can certainly be thankful for that, can't we? The Broken Window Fallacy writ large. It's a good thing major global conflicts like that are infrequent.

Price controls on everything, shortages, and a flourishing black market - for those who can afford it.

You were kidding, right?

"Following WWII the US had half the world's wealth and only 6% of the world's population."

It's probably a good thing that SOME wealth was preserved. If it had ALL been destroyed, Europeans might still be dealing with bombed out buildings, and no running water.

"So it is it any surprise that we are the largest economy in the world still?"

Well, yes, if you attribute it entirely to WW2. That was a long time ago, and even our former enemies are doing better than most others, thanks to help from the US.

"We are but we're also losing ground."

Wait. Either this is a good thing or it's not. Is more equality, among nations a good thing, or not?

"The real scandal is that we can have such a high GDP/capita and still have such awful performance in terms of the various social indicators of health, crime, and educational performance."

Perhaps we have a high GDP/capita despite the enormous growth of government spending as a percentage of that GDP, due to higher income inequality. That would seem to make more sense.

 
At 10/19/2011 5:24 PM, Blogger Ron H. said...

TC: "I like you beer thing;)...but if there was "beer insurance" it's not like you suggest... that someone will make/pay for it and somebody ELSE will drink it..."

Unless we all make our own beer, and drink our own beer, then someone else has to make it. If you have a "right" to beer, then someone is forced to make it whether they want to or not. Therefore, there can be no "right to beer, or food, or housing, or medical care, or anything else that someone else is forced to provide.


You aren't describing beer insurance, but a prepaid beer plan, where you pay an amount for beer. You can understand that this becomes an all you can drink proposition, as everyone attempts to get their fair share, or more, of the beer for the price they pay. This means the price must go up until max beer is being consumed.


"...more like everybody will probably drink beer sooner or later, everybody pays the same for insurance, some will consume more than others....and those that thought (maybe) were going to consume more in the future (but don't in the end) have insured themselves against the potential/expected higher cost..."

All well and good, but how about those who don't drink beer, and don't want to pay for beer for others, or those who want to make their own arrangements for their own beer? Will you force them to participate? Perhaps to support those who want to drink beer but can't afford it?

 
At 10/19/2011 5:28 PM, OpenID Sprewell said...

Larry, Cuba is "still plugging along" too, with costs down at the floor and the quality even lower. You can't have something for nothing, as bad as the US system is in many ways, the quality in your UHC systems is far worse. Haha, I can't believe you are now claiming Singapore as UHC, after I pointed out to you how it isn't anywhere close to the UHC systems you prefer. Let's take your lies one by one:

1. The top rate for their "payroll tax" is 34.5% but that only applies for those under 50, it drops down to 10% as you get older. Also, that goes into a central fund that covers a whole bunch of services, everything from retirement to buying a house to education to buying catastrophic insurance. The medical part goes into an HSA, so you get to choose how to spend it. Finally, the whole central fund is actually a fund, not just an income transfer scheme that is paid out right away like SS in the US.

2. Singapore has subsidized catastrophic insurance, but it is optional, as has been pointed out to Larry before.

His points 3 and 4 are the same thing, Singapore strictly controls what you can buy and for how much in the medical market. So all Singapore is forcing you to do is save money in an HSA and then restricts what's in the menu of medical services you can buy, everything else is left to the free market. If Larry thinks that is "as govt-run as a country could be," I invite him to visit the UK or Cuba or all the UHC systems he prefers, which have nothing close to HSAs and the patient choice that allows.

Singapore is the most cost-effective system in the world and it gets that way because it is more free market in payments than the US, with mandatory HSAs and optional catastrophic insurance, but very govt-controlled in what medical services you can buy with that money, with many high-cost procedures disallowed. But to say that such a mixed system is more govt-run is just ridiculous, particularly when it is govt-run in a completely different way than UHC proponents want. You could write a book filled with "The Lies of Larry," they never stop.

 
At 10/19/2011 5:33 PM, OpenID Sprewell said...

To back up what Ron's talking about, let's look at another market where such dumb pricing leads to hogging: residential internet usage. Most landline internet is bought with flat-rate pricing and what do we see? "The most data-intensive 1% of residential consumers appear to account for roughly 25% of all traffic, the top 3% consume 40%, the top 10% consume 70%, and the top 20% of users consume 80% of all data." Yet another market where pricing is not tied to usage and some hogs overconsume. Gee, I wonder if that could be happening in medicine or education?

 
At 10/19/2011 5:37 PM, Blogger Ron H. said...

TC: "Surely you cannot be suggesting that other countries should write the US ("the richest country in the world") a cheque every year."

It's possible he is suggesting that everyone should pay for what they get.

When you bought that iPhone, did you not write a check to Steve Job's Apple company? One of the richest corporations in the world?
Or, did you expect that he should just give you one, as he was so rich?

Actually, countries don't write each other checks for goods and services like that. Your collectivist views are confusing you. Those who benefited from new drugs would be writing checks to large US pharma companies and others who developed new drugs or procedures.

 
At 10/19/2011 8:21 PM, Blogger Ron H. said...

Z: "Marcus Licinius Crassus started the first private Roman fire brigade."

Does that mean that you believe private fire services to be inferior to public ones?

 
At 10/19/2011 10:28 PM, Blogger mike k said...

I don't see the point fo this post, either.

OK, we are big. And productive.
What is so great about that, and what is wrong with less work and more vacation?-Hydra

Hmm...I don't see the point to your post.

According to some we have an inferior medical system to most developed nations...

We also do poorly on education, relative to the same nations....

Some of these nations have vast reserves of natural resources compared those comparatively small metro areas....

And yet we outproduce everyone else on Earth. How is this even possible given that people in those other countries are better educated and receive better health care than we do?

As to "what is wrong with less work and more vacation?"...

nothing if you don't expect others to pay for it...or for your housing, medical care etc. so you can pay for your vacations.

 
At 10/20/2011 6:27 AM, Blogger Zachriel said...

Ron H: Does that mean that you believe private fire services to be inferior to public ones?

Depends on your goals. If it is to enrich Crassus, then they were clearly superior.

 
At 10/20/2011 7:41 AM, Blogger morganovich said...

larry-

"" taking 80% off the price of a good or service leads to MASSIVE overconsumption."

not in countries where there is UHC.

In fact, it's such restrictions that are pointed out as "proof" that UHC "does not work".

You can't have it both ways."

as i said earlier, you can either get massive over-consumption, or you can ration through disallowing types of care and having wait lists.

waiting 6-8 weeks to see a specialist lets you get by with much less capacity. i'm not having it both ways, you are just ignoring the flip side of the coin.

and the systems are failing. they are deeply in the red and getting worse. what do you do when the whole system fails?

"Friedrich Breyer, a professor of economics at the University of Konstanz in Germany, calculates that in Germany alone between 2020 and 2030 there will be a huge spike in the number of elderly people alongside an enormous drop in young and working-age people. "This will mean a dramatic increase in individuals' payroll tax contribution rates to health care to 20.7% in 2030 and over 23% in 2040," he says. This compares to just 11.4% in 1980."

that's a nation killer.

it'll kill growth and investment.

these systems are all spending more than they take in already.

the singapore system works because users pay, but it's deeply expensive to consumers. 33% all in payroll is a crushing burden.

to say they spend a low % of gdp is one thing, but having 33% taken out of your pay is a savings killer in the rest of your life.

 
At 10/20/2011 7:48 AM, Blogger morganovich said...

truth-

one could have said the same thing about a nation based on the rights of the individual. that seemed utopian at the time as well.

sure, the political will to go to a cash based system is likely absent just now, but that doesn't make it a bad idea.

regarding checks to the US, that wasn't my point.

my point is that the rest of the world would either have a great deal less innovation or more expensive systems if the US did not behave as it did.

their systems in isolation could not exist as they do.

regarding fire, it's a good the affects everyone. i was not arguing that you should have a system you can opt out of (at least not if you are next to another house) but rather that it's a fine service to contract out.

collecting money for a public good does not mean it has to be provided by the government. it's also done on a cash pay basis.

zach-

i'm not really sure what you intend that anecdote to mean. it seems like a non sequitor.

 
At 10/20/2011 7:51 AM, Blogger Larry G said...

" as i said earlier, you can either get massive over-consumption, or you can ration through disallowing types of care and having wait lists."

and in this country - we ration also both for insured and uninsured.

"waiting 6-8 weeks to see a specialist lets you get by with much less capacity. i'm not having it both ways, you are just ignoring the flip side of the coin."

waiting forever or until you die is a capacity issue also.

"and the systems are failing. they are deeply in the red and getting worse. what do you do when the whole system fails? "

show me a real Plan B that is currently working


""Friedrich Breyer, a professor of economics at the University of Konstanz in Germany, calculates that in Germany alone between 2020 and 2030 there will be a huge spike in the number of elderly people alongside an enormous drop in young and working-age people. "This will mean a dramatic increase in individuals' payroll tax contribution rates to health care to 20.7% in 2030 and over 23% in 2040," he says. This compares to just 11.4% in 1980."

that's a nation killer."

no....not... you have to balance how much you pay into the system with how much is paid out.

it works the same way for private insurance guy.


"it'll kill growth and investment."

nope. the money will be invested in health care which will provide jobs.

there will be less big screen TVs and more ankle replacements.

"these systems are all spending more than they take in already."

then they must do what any private insurance must do to stay solvent - increase premiums/reduce coverage or both.

"the singapore system works because users pay, but it's deeply expensive to consumers. 33% all in payroll is a crushing burden."

so why does Singapore rate in the top 10 on the Heritage Freedom Index as well as in the top 10 in life expectancy and infant deaths and the lowest cost per capita for health care?


"to say they spend a low % of gdp is one thing, but having 33% taken out of your pay is a savings killer in the rest of your life."

the facts and statistics don't back you on guy.

 
At 10/20/2011 10:40 AM, Blogger Zachriel said...

morganovich: i'm not really sure what you intend that anecdote to mean. it seems like a non sequitor.

It's hardly a non sequitur. Crassus is an example of a private, for-profit fire brigade. Note that, as with most such businesses, they found a way to maximize profits. No doubt the brigade was highly motivated.

morganovich: this is due to some new technology for creating an artificial joint.

Are you thinking of the STAR ankle system, such as promoted by Jeffrey Mann, and recently approved by the FDA?

 
At 10/20/2011 11:06 AM, Blogger Zachriel said...

morganovich: "Friedrich Breyer, a professor of economics at the University of Konstanz in Germany, calculates ..." that's a nation killer. it'll kill growth and investment.

Well, only if you stand around with your thumbs in your pockets. Breyer has offered a number of practical solutions, one of which is incentivizing later retirement. This increases the time when people are paying into the system, and minimizes the time they are taking from the system.

 
At 10/20/2011 3:01 PM, Blogger Ron H. said...

Z: "Crassus is an example of a private, for-profit fire brigade. Note that, as with most such businesses, they found a way to maximize profits. No doubt the brigade was highly motivated. "

Crassus business would more accurately be called an extortion racket rather than a fire brigade, as it's primary business wasn't providing fire protection.

However, as a fire brigade, it is a good example of what lack of competition can lead to. This is especially true of government monopolies, such as K-12 education in the US, and perhaps soon, healthcare.

 

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