By the time they do it won't be any cheaper where they want to go.
Depends on where they want to go. Mexico doesn't show any signs of moving to a higher standard of living than we have here and this is the most common destination for US ex-pats looking to retire cheap. Mexico would have to have some serious structural changes to ever challenge the standard of living of its Northern neighbor. 28 years under the PRI makes this highly unlikely unless the people and the laws undergo some serious reforms.
You are certainly far more optimistic than even I am for the undeveloped world if you think that the US won't continue to have a higher standard of living than 80% of the world's population. The question will be, do you want to live where it is cheaper? China? India? Africa?
If the Chinese economy grows at the blistering 10% pace it is growing now and the US flounders around 2%, how many years would it take for the GDP per capita of the two countries to be equal without a major currency re-adjustment? Their economy, in dollar terms, is equal to the gross state product of California only it is spread over 1.4 billion instead of 35 million. Even if you use the purchasing power numbers to compare, it would be impossible to pass us any time soon in per capita GDP short of us having another Civil War which would destroy most of the capital infrastructure.
The greatest economic disaster in our history (aside from the Civil War) was the Great Depression. The economy shrank by a third over three years and pretty much so did every other developed country so not much changed in comparative terms. As Japan's economy came into prominence in the 1970s- early 80s, the US floundered with double digit inflation but eventually went back to its historical growth rate when inflation was brought under control. It would have been very difficult for Japan to grow without the US growing as well because they were essentially locked out of the European markets. We're now in the same symbiotic relationship with China and India, those two economies can grow but not without us growing as well since the EU still protects itself from cheap products far more than we do. The Asian economies seem determined to make their growth dependent on exports, like Japan did, instead of growing the way the US did, internally. This makes their prosperity dependant on our continued prosperity. They get a lot richer and we get incrementally richer. Even though the US exports more than any other country in the world, our economy is not as dependant on exports for growth as the EU or Asian countries, exports are a much smaller percentage of our GDP.
Chindia will get relatively more prosperous, but its near impossible for them to surpass us in our lifetimes in terms of per capita GDP. It is per capita GDP which determines the wider measure of cost of living. There will be many cheaper places to live in the world than the US in the future, as there is now. |
