Reality check on China
Reality check on China
Huge growth in percentage terms; far outstripped by US in dollars.
Our reason is quite satisfied, in 999 cases out of every 1000 of us, if we can find a few arguments that will do to recite in case our credulity is criticized by someone else. Our faith is faith in someone else's faith, and in the greatest matters this is most the case.
- William James, from The Will to Believe, a guest lecture at Yale University in 1897
- William James, from The Will to Believe, a guest lecture at Yale University in 1897
Don't confuse this passionate issue with facts!! 
What this doesn't necessarily show is the effect of inflation of the two currencies over the same time, especially when you try to link them together and see the whole issue at hand.
It's also instructive to take a look at just the inflation rate of the US dollar over the same time period. Using 60% inflation as an average over that span of time (rough number based on a few quick online inflation calculators), the actual increase in income is much less. Using $47,000 as the 2010 level and dividing by 1.6 gives us $29,375. This country is definitely increasing its income, but it's not the levels that many would believe.
I also believe that we're not investing into durable good like we used to. Have the same "average family" add up the bills for wireless phone, internet, cable and other services and compare to 1991. The percentage increase on that number would be incredible. As a comparison, the Chinese are seeing that same kind of growth, but within a 10 year period rather than a 20 year period. The Chinese can't always make use of proven methods of coping with change because they're doing it so much faster. That speed of change brings it's own challenges.
What this doesn't necessarily show is the effect of inflation of the two currencies over the same time, especially when you try to link them together and see the whole issue at hand.
It's also instructive to take a look at just the inflation rate of the US dollar over the same time period. Using 60% inflation as an average over that span of time (rough number based on a few quick online inflation calculators), the actual increase in income is much less. Using $47,000 as the 2010 level and dividing by 1.6 gives us $29,375. This country is definitely increasing its income, but it's not the levels that many would believe.
I also believe that we're not investing into durable good like we used to. Have the same "average family" add up the bills for wireless phone, internet, cable and other services and compare to 1991. The percentage increase on that number would be incredible. As a comparison, the Chinese are seeing that same kind of growth, but within a 10 year period rather than a 20 year period. The Chinese can't always make use of proven methods of coping with change because they're doing it so much faster. That speed of change brings it's own challenges.
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phillipsted
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I found the graph interesting and thought others might. I think the starting date is caused by this being the latest 20 year graph produced by the IMF. It's too soon to update it for 2011.
Hearing all the time about the rate of growth in China, I knew they were starting from a very low income level. There are still so many peasants that the number is dragged down. The US, on the other hand looks much better than I expected and its average is being dragged up by the explosive increase in income of the wealthy.
Hearing all the time about the rate of growth in China, I knew they were starting from a very low income level. There are still so many peasants that the number is dragged down. The US, on the other hand looks much better than I expected and its average is being dragged up by the explosive increase in income of the wealthy.
Our reason is quite satisfied, in 999 cases out of every 1000 of us, if we can find a few arguments that will do to recite in case our credulity is criticized by someone else. Our faith is faith in someone else's faith, and in the greatest matters this is most the case.
- William James, from The Will to Believe, a guest lecture at Yale University in 1897
- William James, from The Will to Believe, a guest lecture at Yale University in 1897