Erick-Woods Erickson
Not only is the American economy growing, but we are outpacing China so that any aspirations of China becoming the world’s largest economy are in the rearview mirror.
US gross domestic product rose 6.3% in nominal terms — that is, unadjusted for inflation — last year, outpacing China’s 4.6% gain. While some of the outperformance reflected America’s elevated price increases, the 2023 outturn underscores a broader point: The US economy is emerging from the pandemic period in a better place than China’s.
“It is a striking turn of fortunes,” said Eswar Prasad, who once led the International Monetary Fund’s China team and is now at Cornell University. “The strong performance of the US economy, in tandem with all the short-term and long-term headwinds the Chinese economy is facing, renders it a less obvious proposition that China’s GDP will someday overtake that of the US.”
A lot of Americans still do not feel like the economy is working for them, but the data suggests wages are starting to outpace inflation, which means that should change, too.
This is good news. The number might be revised downward, but unlike Communist China, which regularly lies about its data, the United States governmental data and private sector data can be compared to make sure our government is not exaggerating. Our economy is doing well by every measure in the public data and private sector records.
That presents a political problem for Donald Trump. If people feel the economy is working for them, they will probably start shifting their views on Joe Biden. But that is no reason to root against the economy.
The United States is fast moving from being the tallest midget on the global economic stage to actually standing tall economically.
Policymakers in Washington have long subtly thought China’s rise was inevitable, and they wanted to manage our decline. But the data suggests that will not happen, and perhaps Washington should now stop betting against the American people.
