One of the oddest things about such comparisons, is that no one is talking about asset price inflation in the US led by capital injection by the Fed. Here's one perspective, almost a 23.6% of all dollars ever created were created in 2020, https://www.thestreet.com/mishtalk/economics/23-6-of-all-us-...

As a friend (thanks Tom!) laid it out,

1980
$1.6T in circulation, $2.9T GDP

1990
$3.2T in circulation, $6T GDP

2000
$4.7T in circulation, $10.2T GDP

2010
$8.5T in circulation, $15T GDP

2020
$19T in circulation, $21.4T GDP

All of these dollars had to go somewhere, they went to inflating asset prices, which then lead to more "wealth", which in turn allowed people to charge more for the same goods and services, which in turn leads to what we're seeing today.

In many ways, this post is an argument around Baumol's cost disease (i.e. a bag of saline that used to cost $1 to $10, inflation adjusted, with most of the price being the packaging, now costs $700+ for no discernible reason) than other types of macroeconomic policy. It is surprising that, as a rule, such analyses don't consider the difference in American and European monetary policy. Essentially, even though they are broadly similar, their capital injection system does seem to produce somewhat different effects that are showing up in this data.

More generally, most economic policy discussions have become murkier and stranger because of the difficulty of establishing ground truth through economic data. After all, how do you use something as a reference for measure, when the references rapidly changes in a short period of time? It seems apparent to me that alternative measures need to be used instead, and that their use should be taken more favorably, and when we view the state of these countries through alternative indices.

For example, average lifespans have declined in the US, for several years in a row - a first for the developed world, https://www.advisory.com/daily-briefing/2019/12/02/middle-ag...

The US has the highest infant and maternal mortality rate of these countries, and the rate is increasing https://hbr.org/2019/06/the-rising-u-s-maternal-mortality-ra...

Other measures are trending in the wrong direction as well, from economic mobility, https://www.pnas.org/content/117/1/251 , to a reduction in access to safe drinking water - https://www.sciencemag.org/news/2018/02/millions-americans-d... , and the return of diseases of poverty such as hookworm. https://www.npr.org/sections/goatsandsoda/2017/12/12/5702176...

The flywheel of prosperity has been broken for some time now, and the drift in the US between the "other America" and paper wealth is rapidly increasing. The EU, on the other hand, has had some of the same problems, but to a much smaller degree, and the group of nations has increased in net prosperity when measured through these indices. The question we should ask is why. Why did this divergence happen in America and not Europe?

On a personal note, the metrics I'm most interested in are indirect measures of "effective" research and research into basic science. My experience on both sides of the pond tells me that in some ways, the EU is catching up to the US in that regard - at least in my experience. However, I'd like to find a reliable dataset (or datasets) before making this claim.