A Year-end Report Card
We live in the wealthiest country the world has ever known. We enjoy amenities of daily life unknown to the most powerful royalty of centuries past. For the most part these conveniences are not limited to those with upper income: 98% of households have electricity, 97% have telephones, 93% have public water, 93% have television, 90% have air conditioning, 86% have Internet access. And yet, we lag behind most other democracies with market-based economies on a variety of measures of development and equity.
The Organization for Economic Cooperation and Development (OECD) conducts triennial surveys of member countries’ student performance in reading, science, and math. The latest available results for 78 countries is the 2018 survey: China had the top score for all three subjects; the United States ranked 13th for reading, 18th for science, and 32nd for mathematics.
CEO World Magazine ranks countries based upon the quality of their healthcare systems. For 2021 South Korea had the highest score; the United States ranked 30th out of 89 countries surveyed.
The World Economic Forum evaluates countries’ infrastructure, including roads, railroads, seaports, electrification, and water quality. For 2019 the Netherlands had the highest score; the United States ranked 10th out of 100 countries. In 2017 the American Society of Civil Engineers estimated U.S. total infrastructure needs over the following 10 years required investment of over $4.5 trillion.
Government budget-making entails deciding what services to provide and the level of support for each service. Countries are compared by measuring government spending as a percent of the countries’ Gross Domestic Product (GDP). OECD ranked 32 countries according to percentage of national GDP represented by government spending. The percentage would be higher for governments that spend at a higher level for infrastructure and social services. For each country’s 2020 total government expenditures as a percent of GDP, France ranked highest and the United States ranked 19th out of 32 countries. For each country’s 2020 expenditures for individual consumption (healthcare, housing, education, etc.) as a percent of GDP, Sweden ranked highest and the United States ranked 31st out of 32 countries.
Revenue from personal income taxes is a major source of government income. Countries vary widely in the maximum tax rate levied on citizens’ personal income. Of 38 OECD countries, Japan had the highest maximum income tax rate, the United States ranked 23rd.
OECD ranks 38 countries by their respective poverty rates. Data for 2021, or the latest available for each country, scored Iceland with the lowest overall poverty rate; the United States ranked 29th. For population age 17 and under, Finland had the lowest poverty rate; the U.S. ranked 25th. For population age 66 and above, Iceland had lowest poverty rate; the U.S. ranked 33rd.
A population’s savings rate indicates the availability of income to acquire financial or non-financial assets. Country saving rates as a percent of country GDP were recorded by OECD in 2021 for the latest available year. Norway had the highest saving rate of 35 countries; the United States was 6th from the bottom.
Income inequality is a measure of the distribution of income within a population, calculated as the population’s Gini Coefficient. In 2021 the OECD ranked countries by their respective Gini Coefficients. A high Gini Coefficient indicates income is less evenly distributed; a low Gini Coefficient indicates income is more evenly distributed. The United States had the 5th highest Gini Coefficient of 37 countries.
The sum of these measures has produced situations such as Montgomery County, Maryland, described as having the state’s largest concentration of millionaires, along with a poverty rate that increased from 5.1% to 8.5% since 2000. Sadly, all of the negative attributes of our society are concentrated on a small subset of our population, too often passed from generation to generation. One has to ask: Is this the country we want?
On January 3rd, 2023, the 118th U.S. Congress will convene. As described in the previous Fifty Year Perspective post, mid-term voters’ expectations of their elected representatives require acknowledging the “complex relationships between and among numerous components on the federal agenda: inflation, labor force, immigration, education, environment, social services, infrastructure, public safety, demographics, tax revenues.”