Things are better than you think. Yes, I know, most Americans are in a sour mood these days, convinced that the struggle in Iraq is an endless cycle of bloodshed, certain that our economy is in dismal shape, lamenting that the nation and the world are off on the wrong track.
That's what polls tell us. But if we look at some other numbers, we'll find that we are living not in the worst of times, but in something much closer to the best.
What do I mean? First, economic growth. In 2005, as in 2004, the world economy grew by about 5 percent, according to the International Monetary Fund, and the IMF projects similar growth for several years to come. This is faster growth than in all but a few peak years in the 1980s and 1990s, and it's in vivid contrast to the long periods of stagnation or contraction in history.
The great engine of this growth is, of course, the United States, which produces more than one-quarter of world economic product and whose gross domestic product has been growing at around 4 percent -- 4.7 percent in the latest quarter. Other engines are China and India, each with about a sixth of the world's people, and economic growth of 10 percent and 8 percent, respectively. But other areas are growing, too: Eastern Europe (5 percent), Russia (6 percent), East Asia (5 percent), Latin America (4 percent), even the Middle East (6 percent) and sub-Saharan Africa (5.5 percent).
Lagging behind are the Euro area (1 percent) and the rest of Western Europe (2 percent). Lesson: Sclerotic welfare states produce mass unemployment and stifle initiative and innovation. In contrast, the Chinese and Indian growth rates show how freeing up an economy produces rapid growth, and the continued contrast between the United States and Europe makes the same point. Free market economic growth is enabling millions of people to rise out of poverty every year. Even more than the experts expect -- as the IMF writes, "The momentum and resilience of the global economy in 2005 continued to exceed expectations."
It's worth noting, as the IMF does, that this growth is being achieved with minimal inflation. "The present era of globalization and low inflation has an important precedent: 1880-1914, the era of the classical gold standard," it notes. That period ended with the outbreak of World War I, and there is no guarantee that the current low-inflation growth will continue. There are always downside risks in the economy. But we seem to be living by far in the best economic times in human history.
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