[nebula8804]

I keep seeing this in every industry. "We can't give up America because they buy so much"

"China needs the American market because they can't make up the numbers for the rest of the world combined in the short term"

Can people here help answer where the heck does everyone have the money to buy all this stuff? Especially post COVID with all the layoffs? The US is only 5% of the world population. Europe isn't that poor and many chunks of Asia have a lot of wealth now. Yet America's appetite and more importantly capability of absorbing all manner of goods remains unimpaired...how?!

[tick_tock_tick]

> Europe isn't that poor and many chunks of Asia have a lot of wealth now.

Europe is that poor and while lots of Asia has wealth not by comparison.

> Yet America's appetite and more importantly capability of absorbing all manner of goods remains unimpaired...how?!

We are just that much richer. It's honestly mind-blowing how much more money the average American has then anyone and everyone.

[chrsw]

I'm American and I applied to a software dev role at a European tech company some years ago. The job looked interesting and I thought it would be a fun adventure living abroad. I was shocked how low their salary range was. Even if I got their best offer for that position it would have been less than half what I was currently making. I figured it would be pointless to even to try to negotiate so I just left it alone.

This makes me wonder though, is this sustainable?

[yieldcrv]

It's super sustainable, look at it this way, we talk about various European country's social safety nets and how "America doesn't have that"

well America does, in most states, at low income brackets. free healthcare, subsidized groceries, childcare, even some higher education

which happen to be the same income brackets that most Europeans are at lol

[0xDEAFBEAD]

The most frustrating thing is how successful populist politicians have been at convincing voters that the US is actually going to shit and needs radical change. It becomes a self-fulfilling prophecy when said politicians start chipping away at the underpinnings of our prosperity. Wake up America, you actually have it pretty good.

[dukeyukey]

The US is very rich, but Europe is not poor. Europe is richer than basically anywhere on the planet _except_ the US. Like even compared to Canada or Japan, Europe is (generally) as rich or richer. Poland just overtook Japan in GDP per capita! Both the UK and France are richer than the oil-rich UAE.

[tick_tock_tick]

I mean on an absolute basis the average European enjoys a very comfortable quality of life and often a better work life balance then most in the USA.

That said in the context of this thread on why countries seem to bend over backwards for the "privilege" to sell to the USA it's because everyone is shockingly poor by comparison.

[oblio]

The US is about 40-60% richer than Europe and the US probably has half the world's disposable income plus a voracious appetite for conspicuous consumption.

Some of that consumption is stupid from a sustainability perspective. For example:

Car dependency means that:

- both the initial cost of transportation

- and the ongoing cost are higher

- while the quality of life and health outcomes are worse

than for decent active transportation.

However no one can deny that the money is there in the US.

There are many cases of "money for the sake of money" in the US (healthcare and ultra processed foods being other examples), but again, the US is good at making money. Large, educated workforce on top of a humongous chunk of prime global real estate.

[yieldcrv]

Its pretty impressive and brings you into macroeconomics and monetary policy

Its a long answer but there are many winners in every financial environment in America, while the short answer is that nobody knows how they have money en masse to buy stuff

and the whole system is based on incentivizing them to move that money around the economy, as opposed to collect and save it in a bank account

[mrheosuper]

> where the heck does everyone have the money to buy all this stuff

Borrowing money from the future.

[WillPostForFood]

Yes there have been post-Covid layoffs, but unemployment is 4.3%, roughly at the "full employment" level, and only up 1 point from the post-Covid low.

https://fred.stlouisfed.org/series/UNRATE

[eru]

And we are only talking about 'the' layoffs here because a bunch of tech people got laid off. It wasn't anything special for the overall economy. Some industry or other is always laying people off, and others are hiring.

[corimaith]

Most countries are surplus countries and to maintain that competiveness they do alot of things that ultimately weaken their consumption to go into investment instead. They also a buy alot of US treasuries, giving USA alot of credit.

Because of this, the US dollar is the reserve currency and quite strong, which combined with strong credit means that Americans are quite incentived to spend. Another point is that this dynamic concentrates jobs in high paying roles like Finance, leading to a "winner takes all" economy. Which is relevant because 50% of consumption is done by the top 10% of the population.

[eru]

> Can people here help answer where the heck does everyone have the money to buy all this stuff? Especially post COVID with all the layoffs?

The US economy is doing fine.

[renewiltord]

America is rich as fuck dog.

[chronci739]

> America is rich as fuck dog

Literally this.

Median household income in America is US$8,000 per month.

Half of Americans make MORE than that.

[dukeyukey]

No, half of American households make more than that, and a typical household has 2.5 people.

[chronci739]

> No, half of American households make more than that, and a typical household has 2.5 people.

And 2.5 Americans per household will say “they make more than that”

Kids say “my dad is rich” and wives say “we make $70k/month”

[autoexec]

Americans also have record levels of debit so a lot of that money is going to pay off credit cards and payday loans.

[numpad0]

Well, the question is more like why everyone sell a phone for equivalent of lunch money in US. No one makes a phone at local equivalents of $45, nevertheless it happens and seem to drive some Americans crazy.

[safety1st]

It's wild but true. History provides a partial explanation. In 1960 the US was 40% of the world economy while only being 5% of the world population. It's still about 25% of the world economy today.

The thing is that WW2 decimated most of the advanced economies outside of the US, and for decades afterwards many of them simply weren't managed for growth (i.e. the Soviet bloc). So the US had a huge head start and never stopped running. To this day you still don't really see many other countries being as fixated on juicing consumer spending as the US is. The big play of the last few decades has been all these emerging economies getting good at exports and making a lot of money that way, which has cut into the US' lead, but once they have the money they tend to be less aggressive about getting it circulating internally - it accrues to a fairly small number of people and/or they just sit on a lot of it.

[bobthepanda]

part of the problem is that to get yourself to export competitiveness, you have to essentially underpay workers through restrictions on capital and credit; and once you have done so, these export businesses become so central to the economy and to economic identity that it is politically tricky to reorient the economy.

Add on moralizing about how people should be making and not spending and you've got yourself a recipe for an export-oriented slowdown, since at some point the world won't be wealthy enough to keep raising your economy through only exports. We saw this in Japan, South Korea, and more recently Germany and China.