America Continues To Lead The World In GDP By A Longshot

America Continues To Lead The World In GDP By A Longshot


by Gary D. Halbert

March 7, 2017

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  1. US Continues to Dominate World in Gross Domestic Product
  2. Top 12 Countries Ranked by Gross Domestic Product
  3. US Economy is Not Falling Behind the Rest of the World
  4. Two-Thirds of Workers Don’t Put Money in Their 401(k)s
  5. Other Reasons Why Only One-Third of Americans Contribute


Today, we’ll take a look at some very interesting data released by the World Bank last month, which shows that the United States still dominates the global economy by a wide margin. The US produces almost one-fourth of all global GDP, and has been at that level or higher for over two generations. This is remarkable.

Following that discussion, we’ll turn to another topic which is quite disturbing. New data from the US Census Bureau finds that two-thirds of Americans are not contributing anything to their 401(k) or similar retirement savings plan at work. The latest numbers are far worse than we have assumed over the last 15-20 years.

So we have very good news and very bad news to cover today. It should make for an interesting discussion.

US Continues to Dominate World in GDP

Many of us are guilty of being critical of America in one way or another. Hardly a week passes when there is not some economic or other report that provides cause for concern. But not the one I will share with you today.

The latest global Gross Domestic Product numbers by country from the World Bank were released last month. The graphic below was created by to show the relative share each country contributes to the global economy.

The chart represents the entirety of the $74 trillion global economy in nominal terms. Meanwhile, each country’s segment is sized accordingly to their percentage of global GDP output. Continents are also grouped together and sorted by color.

The chart clearly illustrates just how dominant the United States of America is economically. The US accounted for a whopping 24.3% of global GDP in 2015, and it should be even higher today. China came in a distant second at just under 15% of global GDP.

So whenever you hear about the decline of the United States in terms of the economy, keep this chart in mind.

Per capita output of the United States remains high. Given the size of the country, which is the third largest in the world, per capita output of the United States is still mind-boggling.

Even if we count the European Union as one country, the EU still trails the US by several percentage points in terms of GDP.  The West (meaning the West above the equator) is still dominant and shows few signs of falling behind anytime soon.

We often hear it said that China will soon overtake the US as the world’s largest economy. That will not happen in most of our lifetimes, if ever, as you can see above. China is catching up in terms of gross national productivity, but in terms of productivity per capita (per person), it is still a backward nation.

At least two-thirds of China’s population still lives on poverty-stricken small family farms. It is still a village economy. It is going to take decades for those people to drag themselves out of a level of poverty that Americans have not seen for over a century.



US Economy is Not Falling Behind the Rest of the World

Here is what economic historian and still-prolific writer Dr. Gary North said upon seeing the global chart above and the latest data from the World Bank:

“The idea that the United States is falling behind the rest of the world’s economy is simply nonsense… The United States of America has maintained this enormous share of the world’s output for at least two generations. What more could anybody ask from an economy?

The rest of the world has increased its output to a degree that would not have been conceivable in 1950. This is especially true of China. It is also true of Western Europe. Nevertheless, for all of this increase in output, the United States of America is still the biggest player of all. We are not falling behind.

This tells us that the process of economic growth, which is now worldwide north of the equator, is close to unstoppable. If World War II in Western Europe was a setback that leaves no traces today, then the steady expansion of per capita income of 2% per year overcomes all known setbacks.

We are all richer than we were in 1950. When it comes to things digital, there is simply no comparison. I remember the world of 1950, and the world I live in today is economically much better than the world I lived in back in 1950.

The moral world is much worse [emphasis added: GDH]. There is legitimate cause for hand-wringing in this area of life. But there is no legitimate cause for hand-wringing in the field of economic development.

I don’t care how bad the welfare state seems. I don’t care how bad Keynesian [budget] deficits seem. The fact of the matter is this: we are getting richer, year by year, and if World War II did not set us back, then I don’t think anything will set us back over the next two decades.

There will be a redistribution of wealth in the United States over the next two decades with respect to which groups prosper comparatively and which groups don’t. But the economic pie will be bigger in two decades than it is today.

This testifies to the enormous productivity of the free market economy. The world today no longer deals with communism or socialism, other than North Korea, Cuba, and Venezuela. The Keynesian economy is vastly more productive than Marxism ever was. The world had its fling with Marxism, and that ended on December 25, 1991 [end of the Soviet Union]. The relatively good guys won. The utterly bad guys lost.

Nobody misses the China of 1977 or the Soviet Union of 1990. We should never forget the three-word description by Richard Grenier of the Soviet Union prior to 1991: “Bangladesh with missiles.”

Conclusion: there are legitimate things to be concerned about, but economic growth is not one of them. Western civilization is not verging on collapse. Neither is the world economy…“


I have known Gary North since the early 1980s. He just celebrated 50 years of continuous publication of his newsletters and books last month. He is now 75 years old and writes more today than he ever has — one of the most prolific writers I’ve ever known. Even when I don’t agree with him, he’s an inspiration. You can follow his work at:

Two-Thirds of Workers Don’t Put Money in Their 401(k)s

Americans aren’t saving enough for retirement. That’s nothing new. I’ve been writing about the coming retirement crisis for many years in these pages. But now some disturbing new numbers show that the problem is much worse than we previously assumed. It’s probably been worse than we assumed all along based on new data from the US Census Bureau, which found that:

Two-thirds of Americans don’t contribute anything to their 401(k) or other retirement accounts available through their employer.

Let me put that differently: Only one-third of Americans who have a 401(k) or other retirement savings plan available at work are contributing. That number is much lower than previously assumed and frankly, is staggering.

Until now, the exact size of the retirement saving problem has been unclear since most of the data collected came from surveys, which can be unreliable, especially given how the questions have been asked. The new Census Bureau findings are based on income tax data which is readily available and much more specific.

The good news is the latest data from the Census Bureau is much more reliable.

The bad news is the latest findings are much worse than previous estimates.

Another worrisome finding from the latest Census Bureau data has to do with what percentage of American companies, large and small, offer 401(k)s or similar retirement plans. Here, too, the new figures are far worse than previously believed.

Only 14% of all employers across the US offer 401(k)s or other retirement accounts to their employees, far below the previous estimate of 40%.


Larger companies are much more likely to offer 401(k) plans, and since they employ more people than small firms, skew the overall number of US workers who have this option. The Census Bureau estimates that 79% of Americans work at places that sponsor a 401(k)-style plan.

That number sounds high given the previous statistic showing that only 14% of all businesses offer retirement plans. The reason is that there are so many more small businesses, millions of them, that do not offer 401(k)s or similar retirement savings accounts.

The good news is that 79% is more than 20 points higher than previous estimates. The bad news is that just 41% of big company workers at those employers are making contributions to their plan — more than 20 points lower than previous estimates.

The combined result of those two numbers is that just 32% of American workers are saving anything in workplace retirement accounts. Put differently, almost four out of five workers are employed by companies that offer a 401(k) or similar plan. Yet most workers aren’t using them — either because they’re not eligible or because they aren’t signing up — or they simply can’t afford to make contributions.

Another reason is the demise of traditional pension plans, also known as “defined benefit plans.” Increasingly over the last 25-30 years, American companies have been moving away from pension plans that provide benefits throughout one’s post-retirement lifetime. With Americans living longer, traditional pensions became too expensive for most employers.

According to a Pew Charitable Trusts analysis of survey data released last month, only 10% of workers over age 22 now have a traditional pension. Just 6% of Millennials have a pension while 13% of Baby Boomers do.

Other Reasons Why Only One-Third of Americans Contribute

The bottom line: Millions of Americans aren’t saving on the job because they either don’t have access to a workplace retirement plan, or they do but aren’t contributing to it. Many feel they just can’t spare the cash, but the new Census analysis shows there are other reasons, too.

Not surprisingly, the Census data suggest that well-paid workers find it easier to save than the lower-paid. But income isn’t the only factor. Eligibility is also a major issue for part-time workers and people who change jobs frequently.

Companies often require employees to work for a certain amount of time before they can sign up for a 401(k), and employers aren’t required to allow part-time workers into a plan until they’ve worked 1,000 hours during the previous year.

Another problem made clear by the new Census report is that many workers simply don’t know their company 401(k) exists. Really? I find that hard to believe, but that’s what the report said. Of those who do know, many never get around to filling out the paperwork, or could be intimidated by the need to make their own investment decisions.

Companies can help solve those problems by automatically signing up eligible workers, and requiring them to “opt out” if they don’t want to participate. They can also provide general investment advice to help workers better understand their retirement plan options. But ultimately it is the worker who has to make the final decision, and this can be daunting.

For all these reasons, the new Census Bureau report found that far fewer workers than previously believed are contributing to their company 401(k) plans or similar retirement savings options.

Put differently, the retirement savings crisis is far worse than we assumed just a few months ago. Two-thirds of American workers with 401(k) plans available to them are not contributing, according to the latest Census Bureau study.

Saving for retirement is one of the most important decisions we ever make, but more and more Americans seem to have more pressing financial concerns. This will not turn out well!

Best personal regards,

Gary D. Halbert


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Good article on history of pension plans & current stats on 401-K/IRA savings

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