by Mitch Kokai
Senior Political Analyst, John Locke Foundation
I ran the five-year record through 2015 of U.S. economic growth against that of three other advanced industrial economies: the United Kingdom, Germany, and France.
THE DATA SHOW that none of these economic powerhouses have been any too powerful, with bad to worse growth across the board. The U.S., however, has been far from the worst.
As the nearby chart shows, at 2% over the past five years, U.S. growth in real gross domestic product has run slightly behind that of the United Kingdom, at 2.2%, but noticeably ahead of Germany and France, at 1.3% and 0.8%, respectively.
Growth in 2015—in all cases, measured on a fourth-quarter-over-fourth-quarter basis—stayed consistent with these rankings. At 2%, the same as its five-year average, U.S. growth retained the No. 2 spot, still ahead of Germany and France (both at 1.4%), and slightly behind the U.K. (2.1%).
I believe it’s no coincidence that these rankings coincide with the rankings for each country on the economic freedom index. Compiled by the Fraser Institute, it tracks the degree to which free-market capitalism in each country is allowed to operate.
As of 2013, the most recent year for which data are available, the U.K. had the highest index of the four. At 7.87, on a scale of 1 to 10, it surpassed the U.S. in 2005 and has stayed at least slightly higher ever since. The main reason for the switch: The U.S. index has fallen more quickly—to 7.73 in 2013 from 8.22 in 2005.
Germany’s economic freedom index was ranked third on this list in 2013, at 7.50. France is a distant fourth, with an index of 7.12. Had the U.S. replicated France’s average growth of 0.8% rather than 2.0%, gross domestic product in the U.S. would be $1 trillion less than it is today.