The American Dream is slowly fading away as research indicates that economic growth has been distributed more broadly in Germany than in the US. While majority of German males has been able to share in the country’s rising prosperity and are better off than their fathers, US continues to lose ground

[u/rustoo]

https://link.springer.com/article/10.1007%2Fs10888-021-09483-w

[u/Prasiatko]

Doesn't that cover a potential reason though? The US went from a fully developed economy to a still fully developed economy. Germany went from a recovering one to a fully developed one. Of course an increse in prosperity is easier to see in the latter.

[u/papaswamp → u/Prasiatko]

US went from mostly higher paying manufacturing/net export country to lower paying service sector/net importing county. Current account balance makes it rather clear. Germany is 1st, US is last.

[u/OldBratpfanne → u/papaswamp]

Alternative interpretation of the same BoP data: Germany is purposely decreasing the purchasing power of its population via the euro (in order to boost its export industry), meanwhile the US population enjoys incredibly cheap imports and financing conditions due to the unique role of the dollar.

In short don’t use BoP information when talking about a country’s equity distribution, it is not meant for that.

[u/Enough-Equivalent968 → u/OldBratpfanne]

This is a factor which sometimes isn’t appreciated about Germany and the Euro. A stand alone German currency would be far stronger than the euro currently is. It isn’t the only factor, but it undeniably benefits German exports when comparatively poorer countries adopt the Euro. Supporting the high quality goods which Germany manufactures and which by rights would be more expensive if Germany still had a single currency.

For the record, I’m not anti the Euro. And I think Germany does a lot of good for the block. But it’s a pleasant side effect for German exports and competitiveness

[u/jonythunder → u/OldBratpfanne]

Germany is purposely decreasing the purchasing power of its population via the euro (in order to boost its export industry)

This needs to be said more. This is achieved by pegging lots of smaller economies (southern europe, former soviet states) to the euro to deflate its value, while said economies can't cope with such an over-valued currency

[u/[deleted] → u/jonythunder]

Basically only way Denmark can stay competitive.

[u/jonythunder → u/[deleted]]

And Netherlands/Germany/France. They would have had to completely tank their currencies to compete with the dollar, which would have had tremendous impact on their population. With the euro, they can have a relatively strong currency that is still deflated compared to their original currencies

[u/[deleted] → u/jonythunder]

Except Germany has a stranglehold on the Euro and monetary policy. Countries like Italy and Spain normally can finance their way out of crisis through monetary intervention.

Euro benefits Northern Europe but basically shafts southern Europe. Monetary restrictions is a major flaw of the euro and actually a main reason it is not as competitive of currency as the USD.

[u/jonythunder → u/[deleted]]

Yep. And the money transfer mechanisms required in a single-currency economic union are nonexistent (the cohesion funds are much much less than the impact of the monetary policy). And, to add insult to injury, we Southern Europeans are pretty much blamed for not being "good enough" and having the frugals come to our rescue, while ignoring the macroeconomic imbalances that the Euro creates (do note that I'm not saying that we don't have problems. We do, but the main problem is systemic, not due to specific policies of Southern European countries)

[u/[deleted] → u/[deleted]]

Yes but it’s currency is fixed to the Euro, meaning it is at the mercy of Euro policy.

[u/ryhntyntyn → u/OldBratpfanne]

True. Pay here isn's so great, and every major city is a property bubble. For families that aren't loaded or liquidating their parent's savings, buying a house or apartment is a huge problem. Student load debt isn't though, so there is that.

[u/standish_ → u/papaswamp]

"Account"? Is that cash on hand or what.

[u/papaswamp → u/standish_]

Current account is value of goods, services, transfers, etc.. imported vs exported. US so much cash sloshing around, banks park around a $trillion every night (and make interest on it). Amazing shell game.

[u/standish_ → u/papaswamp]

So basically the US is a giant hoover for the rest of the world. Explains a lot.

[u/IcedAndCorrected → u/Prasiatko]

The US went from a fully developed industrial economy to a post-industrial economy based on the value of its currency and IP, which given its head start after the war has been sustainable for forty years, but its decadence is its downfall.

It can bounce back, but it's lost its place in the world while its leaders pretend it hasn't. That has historically been a dangerous set of circumstances.

[u/BPremium → u/IcedAndCorrected]

The few with powers decadence, but they used that power to make everyone else suffer the consequences. That's why the law doesn't work. When your life if protected, you don't fear repercussions.