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Sunday, January 13, 2013

Lifestyle--The US vs. Western Europe

In recent weeks, I have been reading a great deal and talking with people about the comparative advantages and disadvantages of living in the US versus Europe. The results are a bit surprising and I thought that I would share them with you.

The basic battle line is that in the United States we have relative economic freedom and low taxes while in much of western Europe you have social democracy. Depending on the American with whom you are speaking and his/her political views, Europe may be described as “the Middle Way” (between the free market and socialism), the provider state (my favorite term), the nanny state or merely “land of the socialists.”

The core defense of the European system is that they deliver five things to all citizens: universal healthcare, a strong public transit system, virtually free higher education, child care, and solid retirement plans. They pay for it with higher taxes for all and sometimes confiscatory taxes on higher earners.

Much of the back and forth concerns lifestyle issues as well. Most Europeans have very short commute times while Americans may live 60-75 minutes from work to be in better school districts for their children. Perhaps as a result of short commute time and a solid public transit infrastructure, newspapers still reach 70% of Europeans daily (how American publishers would love that). In general, European cities are safer than the US and public transit is as well.

Interestingly, despite lower wage rates and after tax income in Western Europe, people save far more than Americans. Part of this is that they have far fewer gadgets and less “stuff” than Americans. Housing is tight and cramped in most cities. We have big yards and abundant closet space; most Europeans do not. They pay as much as $9 a gallon for gasoline while we are addicted to cheap oil which allows us to commute long distances and see the USA in our Chevrolets.

Western Europeans live two years longer than we do and many say there is far less stress. To me, they make a point here. How many Americans stay in jobs or take jobs because of excellent health care? In Europe, that is not an issue. In most continental countries, your old age in not lavish but you are cared for in a decent facility.

Also, people work less. While we fear for our jobs, Germans work 400 hundred hours less a year than Americans and the French 300 less. Vacations are usually six weeks while American workers new to a company get two.

Economically, the European way is hard for Americans to swallow. Here, we strive to be among the top 1-2%. In Europe, getting to that level of wealth is much, much harder. Realistically, in many countries, the average European may live better and with less uncertainty than most middle class Americans. Yet, the brass ring of the American dream does not exist for them at all. America remains an aspirational society.

Others say that an industrial base is necessary for democracy. With it, the climate is easy for labor to organize especially in Germany and France, where a vibrant and empowered middle class exists. Bitter left wingers in the US say that our system gives tax breaks to billionaires and pay day loans to the poor!

Low cost education is amazing for those of us who have written huge tuition checks over the years. Yet, a university education is not for everyone. Childhood in Europe is not stress free. By 12, in some nations, you have taken exams that determine whether you are university bound or not. Pressure on youngsters to achieve in school is intense and the competition is very stiff. If you are late bloomer, you have to make a spirited effort with night school and pass some stiff exams to get a college degree. When I think of my carefree childhood in rural New England, I feel sorry for European youngsters.

The big issue facing both the US and Western Europe is my old favorite, demographics. Look at major European countries. Many have a negative birth rate and the number of active workers paying in to pensions and healthcare keeps dropping. At some point, the provider state has to collapse. It is simple mathematics. In the US, we face similar problems with Social Security and Medicare but our bomb has a somewhat longer fuse attached to it.

In my life, I have always ignored security and gone for freedom. For me and many of you reading this, it has worked out splendidly.  For many , however, the European model may seem very attractive although I find it hard to believe that it is sustainable.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

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