We hear it all the time: Since the turn of the 2010s, thanks to the rise of tech, the US has pulled ahead economically. This idea is everywhere from Washington to Davos—and it's paralyzing Europe But it's simply not true! Let's look at what's really happening, with charts🧵
I’m going to focus on the most basic macroeconomic statistics of the US. The numbers are taken from the official national accounts of the Bureau of Economic Analysis. Everything is in the open for everyone to see, and straightforward to compute.
Let’s look first at income growth in the US, using the broadest and most internationally comparable measure of income: national income The growth of US national income is bad. Very bad! National income per adult has increased 1.1% per year on average over the period 2010-2025
But we hear all the time that GDP is growing 2% or 3%, so how is that possible? That’s because the US population is growing (especially the adult population, age 20+) GDP has grown 2.3% a year since 2010 But GDP per adult only 1.3%
To get to national income you need to subtract capital depreciation from GDP, and add net foreign income Each of these steps shaves off an additional 0.1 percentage point of growth, leading to the per-adult national income growth rate of 1.1%
Net foreign income, in particular, has collapsed since 2010, largely because the US has accumulated an enormous international debt Look at the US's net foreign asset position! (= assets owned by the US abroad, minus US assets owned by foreigners)
Back to GDP: There is no productivity miracle in the US. The growth of productivity (= GDP per hour worked) has slowed down markedly. From 1.9% in the period 1980-2010 to 1.1% in 2010-2025 If you think the rise of tech has made people more productive, think again
Because productivity is not growing fast, wages are not growing fast either: +1.1% a year, again, since 2010
Profits used to grow fast in 1980-2010 – much faster than labor income – but that's not the case anymore since 2010: Capital income is also growing at 1.1% a year. Sluggish growth everywhere.
The one thing that is growing extremely fast is the wealth of the top billionaires: The top 0.00001% used to own the equivalent of 3% of national income in wealth in 2010 Now they own the equivalent of 12% of national income!
Scott Bessent says that "the US projects strength." The reality is US growth is at a historically low level, productivity gains are sluggish & the net foreign debt surging. And this is only sticking to macro: I will discuss inequality in a future thread. /end