It seems that the consensus opinion out there is that the U.S. is in decline, China is the new superpower and that our nation’s best times are behind her. We don’t “make” anything anymore. All of our jobs are being sent overseas. Sound familiar? This attitude is somewhat understandable given the financial crisis, severe recession, high unemployment rate, failed banks, bailouts, local and federal debt, housing bust, oil spill, etc., etc., etc. So yes, we have plenty of problems. However, there is plenty right with the good old U.S. of A. and the negative perceptions do not match up with reality. July puts me in a patriotic mood so read on.
The U.S. economy is still the largest and most productive on the planet. We account for about 25% of the world’s economic output despite only having 4.6% of the global population. Our economic output is larger than the next three largest economies (China, Japan, and Germany) combined. If you look at per capita income, China is only about 10% of that of the U.S.*
The U.S. continues to be a manufacturing superpower. Contrary to popular opinion, we still make a lot of stuff. In fact, we make more goods in a year than any other country. We are the world’s largest exporter. Yes, China exports more goods but that is only half the story. You have to also look at the export of services; things like accounting, data- processing, medical services, and telecommunications. When you add global service exports to goods, the U.S. tops all others. All together these exports totaled $1.5 Trillion in 2009, nearly 10% of the total globally. Germany ranks second with 8.5%. 1
The rest of the world continues to invest in the U.S. We are the preferred destination for foreign direct investment. Where did money flow during the financial crisis and just recently during the European debt crisis? This so called “flight to quality” went into the safety of U.S. government bonds. The U.S. dollar remains the world’s reserve currency. We lead the world in technology and innovation. We are at or near the top of scientific research institutions and corporate spending on research and development. Our higher education system is the best in the world and a top destination for foreign students. Over half of the world’s top global brands are American. *
I could go on and on but space dictates I stop here. All in all the U.S. is not a bad place to invest in, don’t you think? I sure do.
* Barron’s 6-7-10, Go Long America
Damien helps individuals invest and manage risk. He is a Certified Financial Planner™ professional and a principal of Walnut Creek Wealth Management. These are the views of Damien Couture, CFP® and should not be construed as investment advice. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Not all recommendations are suitable for all investors. Each investor must consider their own goals, time horizon and risk tolerance. Your comments are welcome. Damien can be reached at 925-280-1800 x101 or Damien@WalnutCreekWealth.com.