United States Economy Essay
Economic differences between the United States and Europe
The European Union and the United States, despite being collectively called “the West”, have gaping economic disparities between them that span as wide as the Atlantic that separates them. There are a number of fundamental issues to look at while describing the economic differences between the U.S and Europe. This paper will treat the European Union as a Unit and the United states as a separate unit. The functional undercurrents within the individual states of the European Union will be viewed in light of their collective effects on the entire union. Furthermore, the differences will be assessed in light of their impacts on the quality of life in both the United States and the European Union.
While both the European Union and the United States are considered distinct units, the “glue” that holds them is different. The fifty states of the U.S are held together by much stronger bonds than the comparatively flimsy affiliations between the member countries of the European Union. The manifestation of this is the fiscal union between the member states of the U.S. All the citizens within the fifty member states of the U.S remit their taxes to a central federal kitty that is then spread across the fifty member states equitably. This offers a mechanism of ensuring that the disparities between the fifty states of the U.S are narrowed. This is especially critical for states that do not have adequate resources to deal with natural disasters and other impromptu needs. When a hurricane hits one state, there are mechanisms by which the federal government can consign funds to the affected state to aid its recovery. One such program is Medicaid, by which the citizens of Mississippi, for instance, can get relief through fiscal transfers in case of hurricanes, floods or other natural disasters.
By stark contrast, the member states of the European Union have no such programs. The member countries have to rely on either aid or debts in order to offset the costs that come as a result of sudden disasters. This aggravates the economic disparities between the member states of the European Union.
Another difference between the U.S and Europe is the labor mobility. By virtue of the fact that the United States is effectively a single economy, laborers can freely move from one point in the country to another. This has the advantage of distributing the workforce throughout the country. Moreover, the effect of high mobility of workers dilutes the income disparities among the member states of the United States. In contrast, the European Union has a few more restrictions that are pegged to movement among the states of the Union. The movement is not as free as it is in the United States.
Movement of people between the states is instrumental in measuring the economic strength of regions. When labor moves, there is an even distribution throughout the country. One part of the country is not excessively disadvantaged in terms of labor shortage as compared with another. In gross effect, the need for fiscal transfers between regions is reduced because of the seemingly even distribution of the labor and income.
Yet another economic difference between the European Union and the United States is the effect of the currency on the economy. While the U.S dollar has presented little else apart from good tidings to the economy of the United States, the Euro has come with a whole bundle of problems. The Euro was introduced as the preferred European currency amid protests by seasoned economists as to the feasibility of the idea. Politicians ignored the clamor of the economists. The debt crises in a number of European countries are as a result of the imbalances that the Euro brought about. Countries such as Greece are today grappling with huge amounts of debt that would have been avoided if the Euro had not been adopted.
Interestingly, the proponents of the Euro cited the United States of America as an example by which to justify the successes of a single currency. Unfortunately, the proponents of these arguments were people who were championing the political union of European States, and they viewed a single currency as a way to enhance this political union. They overlooked fundamental economic differences between the United States and the European Nations. Two such differences have been discussed; one is that the United States has a central fiscal system, which the European Union lacks. The other is that the U.S is a single labor market, and movement across the states is not prohibited by any significant barriers.
Another important difference that exists between the European Union and the United States is that the budgets of individual states are well balanced and regulated so as to ensure equitable distribution of federal funds. When the economy of a state does particularly well in one year, the obligatory funds that the state receives from the federal government are reserved for capital projects. There are o such budgetary control measures for the members of the European Union, which makes harmonization of development among the European States cumbersome and idealistic. Thus, European nations continue to display generous disparities in their economic strengths.
Despite the stronger economy that the United States boasts, there are problems with its economy, as well, that the European Union seems to have circumnavigated. When people consider some of the best places in the world to live in, they almost always turn to Europe. There are a number of areas where Europe has outpaced the United States and one of them is the flat distribution of wealth. In Switzerland, for instance, even the workers of the lowest cadre of skill earn about $3,000 every month. This makes the goods a bit more expensive than they are in fiercely capitalist nations such as the United States, but the citizens of such countries do not take the heat of economic disparities.
Moreover, European countries have been commended repeatedly for their high-quality medical care services. That they are expensive is true, but the individual states have put in place measures to ensure that all the citizens have access to the best healthcare by programs that target all members of the population. In the U.S, it is not uncommon to hear cases where critically ill patients are turned away at hospitals because they lack insurance cover or because they are not citizens of the U.S. Practices such as these are considered archaic in Europe. The healthcare system in Europe is structured in such a way that it serves its purpose, putting human life ahead of monetary gains.
Yet another important difference between the United States and Europe, which paints Europe in a slightly better light, is the fact that Education costs have been greatly subsidized. As compared to the United States, Europeans enjoy highly affordable University fees. University education does not immerse the students into lifelong debts as they do in the United States.
However, all taken into consideration, the United States is better off economically than European countries under the European Union. However, the U.S. has not demonstrated the ability to convert this superior economic position into a situation that would be enjoyable for its citizens. Thus, despite the U.S boasting a better economy than the European Union, the standard of life in Europe is considered much higher than that in the U.S.