Link (paste these two together):

http://today.reuters.com/news/articlenews.aspx?type=domesticNews&storyID=2006-09-

26T155129Z_01_L2681443_RTRUKOC_0_US-ECONOMY-COMPETITIVENESS.xml&archived=False

Quote :

"U.S. drops to 6th in world competitiveness ranking By Laura MacInnis GENEVA (Reuters) - The United States fell to sixth place in the World Economic Forum's 2006 global competitiveness rankings, ceding the top place to Switzerland, as macroeconomic concerns eroded prospects for the world's largest economy. In a report released on Tuesday, the Forum said Washington's huge defense and homeland security spending commitments, plans to lower taxes further, and long-term potential costs from health care and pensions were creating worrisome fiscal strains. "With a low savings rate, record-high current account deficits and a worsening of the U.S. net debtor position, there is a non-negligible risk to both the country's overall competitiveness and, given the relative size of the U.S. economy, the future of the global economy," it said. While stressing U.S. dominance in education and innovation should keep the country among the world's most competitive "for the foreseeable future", the report said economic concerns had made other countries more attractive for business leaders. Augusto Lopez-Claros, chief economist of the World Economic Forum, said that without redress, such worries "could allow other countries in a highly competitive global economy to challenge the U.S.'s privileged position". Switzerland was deemed the most competitive economy in 2006, followed by Finland, Sweden, Denmark and Singapore. After the United States, which had topped the 2005 index, Japan, Germany, the Netherlands and Britain rounded out the top 10. The Geneva-based group Forum said that Switzerland's well developed infrastructure, plentiful scientific research and intellectual property safeguards helped vault the small Alpine country into the index's leading position. As in Switzerland, it said high-ranking Nordic countries benefited from strong institutions and excellent education and training, but said they lagged in labor market flexibility. Most European Union countries saw stable competitiveness readings over the past year, but Italy's competitiveness ranking fell to 42nd -- compared to 38th last year -- because of ongoing macroeconomic and institutional weakness. RUSSIA, CHINA SLIP Russia slipped nine places for a 62nd-place ranking this year, largely due to private sector misgivings about the independence of the country's judiciary, according to the report based on surveys of more than 11,000 business leaders worldwide. "Legal redress is Russia is neither expeditious, transparent nor inexpensive, unlike in the world's most competitive economies," it said. "Partly because of this, the property rights regime is extremely poor and worsening." China's ranking also fell -- to 54 from last year's 48. The report said China had a mixed performance this year as fast growth, low inflation and high savings rates were muted by banking weakness concerns, poor penetration rates for mobile phones, computers and other technology, and low secondary and tertiary school enrolment rates. Fellow Asian powerhouse India gained two places to rank 43rd in the World Economic Forum ranking, with persistent poverty, weak health infrastructure and a large public sector deficit offsetting advances in technological services. Chile, ranked 27, led Latin America's showing in the 2006 index while Brazil slipped nine places to 66th as a result of a worryingly large budget deficit, the report said. Regional neighbours Bolivia, Ecuador, Nicaragua and Paraguay ranked much lower and were listed as "among the worst performers for basic elements of good governance, including reasonably transparent and open institutions". Venezuela slipped four places to 88th despite the emergence of a budget surplus in the oil exporter. The World Economic Forum said the OPEC member needed stronger institutions to fight graft and reduce government interference in the economy. In the Middle East, oil price gains have improved business confidence in countries such as the United Arab Emirates and Qatar, ranked 32nd and 38th. The report said more investments in human capital would help the energy-dominated region diversify its economies and further improve its competitive prospects."

What game will we play now? Shoot the messenger? Shoot the source? Shoot the methodology? Or consider the implications?

[Edited on September 26, 2006 at 1:48 PM. Reason : page stretch]

9/26/2006 1:41:39 PM

its the fault of (pick one)

-bush
-clinton
-socialists
-republicans
-terrorists
-immigrants
-chinese

9/26/2006 2:07:06 PM

This can't have only gotten 1 reply because only 1 poster had an opinion about the findings...

9/26/2006 2:08:45 PM

i thought USA was suppost to be #1?

[Edited on September 26, 2006 at 2:10 PM. Reason : ?]

9/26/2006 2:09:52 PM

the 2nd link needs to be edited, btw.

Quote :

"The report said China had a mixed performance this year as fast growth, low inflation and high savings rates were muted by banking weakness concerns, poor penetration rates for mobile phones, computers and other technology, and low secondary and tertiary school enrolment rates. "

China suprises me the most. It's interesting to see how they're adapting towards a knowledge-based economy now, and how they're also moving towards a more conservation-conscious approach to econ. policy. I'm keeping an eye on them.

[Edited on September 26, 2006 at 2:15 PM. Reason : .]

9/26/2006 2:12:42 PM

Well, I'm not really worried about this situation.
I mean, being the 6th most competitive nation in the country this year isn't like being the worst at something.

I would like to hear more about what a "competitiveness ranking" is anyhow. I didn't get much from this report except that we are faultering based on our low tax rate, spiraling medical and pension cost commitments, and debt.

I think only the middle one of these is a major problem.

9/26/2006 2:25:48 PM

Quote :

"its the fault of (pick one) -bush -clinton -socialists -republicans -terrorists -immigrants -chinese"

I miss the days when we could just blame everything on el nino.

9/26/2006 2:30:29 PM

Quote :

"the 2nd link needs to be edited, btw."

I pasted them side-by-side, with no spaces, and it worked for me?

9/26/2006 2:30:30 PM

Quote :

"spiraling medical and pension cost commitments"

and yet how many people don't get medical coverage?

its time to do something about providing that, and it should be done at the local level.

[Edited on September 26, 2006 at 2:32 PM. Reason : ^theres a tww tag in the 2nd one]

9/26/2006 2:31:57 PM

Quote :

"its the fault of (pick one) -bush -clinton -socialists -republicans -terrorists -immigrants -chinese"

Heh, I'd attribute it to a problem of scale. Look at who ranks highest. They're all fairly efficient and homogenous nations. The fact that the US makes it in at 6th considering out size, failing manufacturing sector, and diversity is pretty impressive. If this were a rating of economic influence, we'd still be at number 1.

So since our scale and diversity is to blame... Let's go with immigrants. Damn them for bringing diversity, conflict, and size to our country!

[Edited on September 26, 2006 at 3:19 PM. Reason : ]

9/26/2006 3:18:51 PM

THOSE...ALIENS!

9/26/2006 3:20:21 PM

I think that they make fair criticisms: few would dispute the rising costs of pensions and health care. Even Corporate America has been screaming about those two issues recently let alone the general public. I also agree that government spending is out of control though I seriously wonder how they are going to bring these three issues back in order without making unpopular or unsound policy choices.

I'm comforted though that at least our education and innovation were still driving our economy.

Quote :

"intellectual property safeguards "

This is an interesting statement given the current debates about intellectual property rights that are currently raging in the United States.

Quote :

"lagged in labor market flexibility"

This is probably the one biggest problem that Europe is going to face as more and more of their workers get closer to retirement age. Not that many people are happy about the "flexibility" of the American labor market though...

9/26/2006 3:28:19 PM

(ehm .... Am I the only one that noticed that the top ones are socialist countries ...)

... As you were ...

9/26/2006 3:38:16 PM

BUT SOCIALISM IS EVIL.

9/26/2006 3:39:23 PM

Hmm, last I checked there are no known socialist elements to those countries.

The respective governments of those countries play little to no role whatsoever in the economy. Hell, they have privatised railroad networks. I'm not sure, but I believe their postal service is also privatised.

What you meant to say was that those countries have free-enterprise economies will little to no government influence upon business expansion and pricing decisions coupled with pervasive social programs covering pensions, health-care, and welfare.

Remember: Socialism involves government ownership of the means of production.
What they have their is at best regulated capitalism.

9/26/2006 4:01:09 PM

^thats what most left parties in america (democrat and green) favor, yet they get labeled as socialists all the time.

crisis in semantics.

9/26/2006 4:18:42 PM

Quote :

"Gamecat: What game will we play now? Shoot the messenger? Shoot the source? Shoot the methodology? Or consider the implications?"

How about "shoot the people who get their panties in a twist over reports like this while businesspeople keep immigrating to the US by the thousands every year"?

9/26/2006 4:22:02 PM

Quote :

"and yet how many people don't get medical coverage? "

So your solution to

Quote :

" "spiraling medical and pension cost commitments" "

is to extend those commitments to more people?

I'm going to try to get myself out of credit card debt by using credit cards to purchase everything. I'll let you know how it turns out.

9/26/2006 4:27:28 PM

Quote :

"is to extend those commitments to more people?"

It's a moral obligation.

9/26/2006 4:30:12 PM

I say that all should have some sort of coverage, through whatever means is most feaseable for our economy. Are you one of these types that thinks noone, not the gov. or a private enterprise, should help their constituents get coverage? i see it as a moral issue.

all i said was that people need it, nothing about how to get it.

[Edited on September 26, 2006 at 4:30 PM. Reason : .]

9/26/2006 4:30:29 PM

do we need to demonstrate to you exactly why socialized healthcare is a prescription for death?

9/26/2006 4:32:35 PM

Quote :

"Are you one of these types that thinks noone, not the gov. or a private enterprise, should help their constituents get coverage? i see it as a moral issue. "

You said we need to extend it locally. I assumed you mean the government and I don't advocate the government providing healthcare to its constituents under most circumstances. I'm ok with covering kids, but adults need to get their own. I have to purchase my own health insurance, so should everyone else.

And before you jump on me and say I can afford to, know this: Right now I actually lose money at work because I'm starting a business. I'm relying on my life savings to pay for my health insurance and I'm only applying for catastrophic coverage.

Such is life. If you can't afford something, you do without it. Does it suck testicles that its something important like health insurance? Absolutely, but it doesn't mean that the government should foot that bill.

Also, I'm not convinced that a HUGE amount of people can't afford coverage. I'd bet that a lot of people who don't have coverage could easily fit it into their budgets if they cut back on cable or satellite, beer, and nike shoes.

Those that truly cannot afford health coverage should probably be helped.
But I favor people like you who think its important should start a foundation that pays for poor people's insurance as long as they meet certain requirements. Like minded people like you can do that, right? Why should those that don't agree put up the cash through taxation?

9/26/2006 4:38:05 PM

because i see it as a societal obligation to take care of each other in some way on this level. one's well-being isnt just any commodity or widget or what have you, to me.

oh look, we have different philisophies on life, good for you.

[Edited on September 26, 2006 at 4:43 PM. Reason : .]

9/26/2006 4:43:01 PM

I think the biggest argument against government-funded healthcare is that politicians are dangerous.

There's been plenty of examples since, but take a look at the March 9, 2001 news coverage of government-funded health insurance here in NC (the article title was "Kids' insurance needs CPR" in the N&O). Pretty sobering stuff...

9/26/2006 4:44:19 PM

well, then free up the money for businesses to provide. lower property taxes, shift it to real-estate taxes.

[Edited on September 26, 2006 at 4:49 PM. Reason : .]

9/26/2006 4:46:27 PM

right as I was about to say "I agree with you wholeheartedly"... you go and edit your post

9/26/2006 4:51:13 PM

what, shift it to something consumption based or to something not assesed to everyone?

i dont know, what works better than shifting it to a real estate tax?

if that fair tax really did work, it would be ideal i suppose.

[Edited on September 26, 2006 at 4:57 PM. Reason : .]

9/26/2006 4:51:59 PM

^ Maybe you didn't notice ... Switzerland, Finland, Sweden, Denmark ... countries with some of the highest taxes and most extensive social programs are also the most competitive (and also have some of the highest standards of living, by the way) ....

9/26/2006 4:53:45 PM

^i know, im just being creative here...

all gov. is (or should be) local. smaller areas (or smaller countries) are better able to provide as such. this is why an issue like heath care comes down to the most basic units, be it state, city, county, or one's own business.

9/26/2006 4:56:16 PM

fire Newt!

9/26/2006 5:01:46 PM

Quote :

"PinkandBlack: i dont know, what works better than shifting it to a real estate tax?"

I don't like real estate taxes b/c they're pernicious and routinely used by the government to herd around the poor like cattle. Of course I hate the "FairTax" too...

My favorite is a 25% flat income tax, and abolish everything else. Revenue neutral, simple, and the government can't use the tax structure to play like a social engineer anymore...

9/26/2006 5:05:37 PM

i prefer consumption taxes, personally

9/26/2006 5:08:14 PM

^ I agree with flat taxes ...

9/26/2006 5:09:30 PM

Quote :

"Hmm, last I checked there are no known socialist elements to those countries."

Almost all of them are primarily controlled by Social Democrats, who are nothing less than a different flavor of socialist.

Quote :

"What you meant to say was that those countries have free-enterprise economies will little to no government influence upon business expansion and pricing decisions coupled with pervasive social programs covering pensions, health-care, and welfare."

Many of these countries governments have large state owned businesses. Perhaps not for too much longer in Sweden, but after the Swedish right ruins the economy agian, the social democrats will be right back in to fix things back.
http://www.ft.com/cms/s/d220f5c4-4747-11db-83df-0000779e2340.html

9/26/2006 5:09:43 PM

Quote :

"LoneSnark: Remember: Socialism involves government ownership of the means of production."

You'd have to put Webster down for perhaps a second, but I'd argue that laws are part of the means of production. Laws exist to preserve and regulate the means to property, and I'd argue they're owned by the government.

Quote :

"LoneSnark: What they have their is at best regulated capitalism."

Regulated by whom?

9/26/2006 5:44:23 PM

Quote :

"TGD: My favorite is a 25% flat income tax, and abolish everything else. Revenue neutral, simple, and the government can't use the tax structure to play like a social engineer anymore..."

Long range implications?

9/26/2006 5:44:55 PM

Quote :

"Laws exist to preserve and regulate the means to property, and I'd argue they're owned by the government."

So, wait, any country in which laws are made by Government shall now be referred to as "Socialist"? Is there a country on this planet that does not have its laws being determined by a government of one form or another?

Hell, with this definition 16th Century America was socialist, 19th century Britain was socialist, 1950s Hong Kong was socialist, etc. etc.

9/26/2006 6:00:30 PM

It's a unique view of history, I know.

9/26/2006 6:11:25 PM

Quote :

"i prefer consumption taxes, personally"

Consumption taxes are fine if you exempt food and basic needs. Otherwise they're extremely regressive as the poor tend to spend almost all their income on items that would fall into those categories. The problem then is in defining basic needs. A house is probably something that would be accepted as a basic need, but a mansion really isn't. If you exempt housing in general, then the wealthy can use real-estate purchases to shelter their money from taxation. If you graduate the exemptions, then you're not really creating THAT much of a simpler code.

If retailers treated those exemptions like they treat the NC sales tax holiday exemptions, then everything would go to hell. I was amazed how many places sold iPods as "computer storage devices" for the back to school sales tax holiday.

9/26/2006 7:14:23 PM

Quote :

"do we need to demonstrate to you exactly why socialized healthcare is a prescription for death?"

Do you mean that living a healthier longer life is really a prescription for death? Damn you Norway, Sweden, Cuba for all twisting your statistics to show better health in your country. You're really giving the people death. Damn you.

9/26/2006 7:59:04 PM

I dont see why going from 1st to 6th in something like this is some kind of disaster.

First of all, it is just one group's opinion.

Secondly, I dont think it really makes much of a difference whether youre first, sixth, or tenth in something like this.

Thirdly, if youre actually concerned about the competitive position of the U.S. economy, the nations ranked above us are really, really, small.

9/26/2006 10:03:17 PM

^^ fuck those heathy clean countries

[Edited on September 26, 2006 at 10:49 PM. Reason : sans cuba]

9/26/2006 10:48:55 PM

Quote :

"nutsmackr: Do you mean that living a healthier longer life is really a prescription for death? Damn you Norway, Sweden, Cuba for all twisting your statistics to show better health in your country. You're really giving the people death. Damn you."

Not to jump into this debate, but that "healthier longer life" isn't all that significant compared to the massive increases in taxes (as % GDP) the other countries collect, at least based on OECD data. Average lifespan improvement at the high-end was Japan IIRC, and their average rate was only something like a year and 3 months higher than ours.

Of course that was back when Socks`` and I were debating the issue, so Lord knows how many years ago that was

---

Quote :

"Gamecat: Long range implications?"

I'm sure I probably pondered them at some point, but we all know it will never happen so I gave up  

9/27/2006 2:39:46 AM

I'd still be curious what impacts that would have.

9/27/2006 2:50:50 AM

Quote :

"Maybe you didn't notice ... Switzerland, Finland, Sweden, Denmark ... countries with some of the highest taxes and most extensive social programs are also the most competitive (and also have some of the highest standards of living, by the way) ...."

Dare I also say that these countries make poor comparisons with the United States? These are afterall, tiny countries in comparison with far more homogenous populations and tightly controlled borders. While there are certainly lessons to be learned from them, there are a lot of practices that would not scale and transfer properly to the United States.

Consider some of the socialist nations that make better (though still imperfect) comparisons with the United States: France, Germany, Italy, Canada, and the United Kingdom. They also have high taxes extensive social programs but are much farther down the rankings.

9/27/2006 11:31:03 AM

The US gets bad marks primarily because of high military spending and awful fiscal policies.


Socialized services are harmful only because they are expensive but war ain't cheap either. If you had to spend $100 billion on healthcare or $100 billion on Iraq - spending on health care would go a lot farther economically.

Switzerland is about awesome. I went to an economics conference there this summer. The tax rates are lower than in the US and there is little regulation. Its everything that is good about America but no neo-cons. As such their economy is booming.

9/27/2006 1:14:03 PM

^^but is there really a point to splitting hairs over GDP as long as the avg. citizen has a high standard of living, as people in all of those nations do? the only one with real problems right now which arent being tended to is france, and that's moreso due to strict labor laws, not taxation.

9/27/2006 1:19:09 PM

^
Well I wouldn't say that. Both Germany and Italy have rampant unemployment that only seems to be getting worse.

Italy amazingly enough has high youth unemployment despite a population that is so top heavy that the projections are for a decline in population over the next decade.

Stil, I would probably say that the UK today and the US durring the Clinton years are far evidence that high taxes are not sufficient to deter growth. Labor market rigidities are much worse.

-Karl

9/27/2006 4:33:52 PM

Well, Germany is beginning to rebound now. Their trade surplus is going through the roof, supposedly. Like you said, its labor laws, not taxation thats primarily causing these problems. The UK and Canada have unemployment of 4.8% and 6.8%, respectively, and Canada's has only increased in recent years. Both nations have gotten by on socialized healthcare and higher taxes for years.

Italy has had corruption issues for years now.

France is France.

The EU average unemployment is 9.4%. This is mostly pulled up due to the addition of former Eastern Bloc countries such as Poland, who has a 18.2% unemployment.

Let's look at the Asian economic powers...Taiwan for instance:

Quote :

"Healthcare in the ROC is managed by the Bureau of National Health Insurance (BNHI).[35] The current program was implemented in 1995 and is considered a social insurance. The government health insurance program maintains compulsory insurance for employed, impoverished, un-employed citizens and persons of natural disasters with fees that correlate to the individual and/or family income; it also maintains protection for non-citizens working in Taiwan. The 2001 premium for the district population was US$18.88 per person per month.[36] A standardized method of calculation applies to all persons and can optionally be paid by an employer or by individual contributions. BNHI insurance coverage requires co-payment at the time of service for most services unless it is a preventative health service, for low-income families, veterans, children under the age of 3, or in the case of catastrophic diseases. Low income households maintain 100% premium coverage by the BNHI and co-pays are reduced for disabled or certain elderly peoples."

Quote :

"in December of 2004 only 13.3% of people were dissatisfied with the healthcare system with 76.6% ‘Satisfied’"

http://en.wikipedia.org/wiki/Republic_of_China

Taiwan's unemployment rate is 4.1%

Ok, not a fair comparison since Taiwan is much smaller than the US. It goes to once again show, these programs are best implemented more locally.

9/27/2006 4:47:03 PM