From: Han Huang (hhuang@MIT.edu)
Date: Fri Dec 11 1998 - 18:33:35 MST
I did some number crunching. Using the G7 economic data, I ran a
covariance analysis on Matlab and my least mean squares estimate
showed:
1% GDP more spending
--> 0.35% higher unemployment
--> -$196 purchasing power per capita
1% GDP more taxation
--> 0.44% higher unemployment
--> -$334 purchasing power per capita (before taxes)
correlations
0.94 spending-unemployment
-0.41 spending-purchasing
0.96 taxation-unemployment
-0.60 taxation-purchasing
Now I made some faux pas--comparing % of GDP of 1996 with unemployment
in 1998. But still, if you look at the taxation burden chart on:
http://www.access.gpo.gov/su_docs/budget99/guide/guide02.html
You'll notice the G7 data doesn't change that dramatically.
Unemployment rates, growth, % of GDP. These don't change that
dramatically over time.
Lessons:
-US and Japan are the least socialist. They also have the lowest
unemployment figures. Japan is entering its 3rd year of recession--
basically the direct result of government intervention.
-France, Germany, Italy are the most socialist. They typically have
double-digit unemployment (in contradiction to the OECD data I found,
Germany reportedly has an actual unemployment rate of nearly 11%).
-Canada has grown more and more socialist, and it's unemployment has been
8+% compared to the US's below 5% as of recent year. Canada has been
growing slower, and has significantly less purchasing power than the US.
-United Kingdown under Thatcher/Major has been reducing its tax burden.
Not surprisingly, it has been outperforming the continent, thought not
by all that much.
You can look up the 1997 G7+Russia data on the US State Department:
http://www.state.gov/www/issues/economic/summit/fsg7data97.html
Observe that the more socialist a nation is, the higher its
unemployment rate, and in general the less wealthy it is.
-Han
*--------------------------------------------------------------------*
Stats are taken from:
http://www.oecd.org/publications/figures/pubsec_a.pdf
GOVT BURDEN AS % OF GDP
public sector
revenue spending employment
Canada 42.7 45.8 19.6 1995
France 48.2 51.6 24.9 1996
Germany 45.9 46.6 15.4 1995
Italy 44.5 49.5 16.1 1995
Japan 32.0 28.5 6.0 1995
UK 37.2 42.3 14.1 1994
US 32.1 34.3 13.4 1995
--------------------------------------------
37.1 38.7
http://www.oecd.org/news_and_events/new-numbers/sur/nw98-119a.htm
UNEMPLOYMENT RATE (10/98)
Canada 8.1
France 11.8
Germany 9.3
Italy 12.3 (7/98)
Japan 4.2
UK 6.2 (8/98)
US 4.6
------------
6.7
http://www.oecd.org/std/nahome.htm
1996 PURCHASING POWER
exchange purchasing
CANADA 19,330 21,529
FRANCE 26,323 20,533
ITALY 21,127 19,974
JAPAN 36,509 23,235
GERMANY 28,738 21,200
UNITED KINGDOM 19,621 18,636
UNITED STATES 27,821 27,821
(the 1998 figures favor the US significantly more)
http://www.oecd.org/publications/figures/demo_a.pdf
1996 population figures (in thousands, and in % of G7)
Canada 29,964 ( 4.42%)
France 58,380 ( 8.61%)
Germany 81,877 (12.08%)
Italy 57,473 ( 8.48%)
Japan 125,864 (18.57%)
UK 58,782 ( 8.67%)
US 265,557 (39.17%)
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