The past week has brought political theater to a level that most of us will witness only a few times in our lives — a hotly contested presidential election that could go either way, coming right down to the wire.
After watching the campaign evolve for 18 months now, Americans finally get a chance to go to the polls and cast their vote for president — and, of course, for Congress as well. Unfortunately, the day also brings a sober reminder:
Our next class of political leaders will have a mess on their hands.
Nowhere is this more evident than by looking at the United States’ economy in comparison to Mexico’s. As we have struggled through the economic murk of the post-crisis years, Mexico has staged a monumental recovery. By almost any measure, Mexico has us beaten. The numbers — all of which are 2012 estimates available on the International Monetary Fund’s website — are enough to give any American pause.
Let’s start with unemployment. While we’re busy arguing over the reliability of BLS numbers, Mexico has reduced its unemployment rate to 4.8% — under 60% of the United States’ 8.2%. There’s no doubt wages are vastly lower in Mexico, but the absolute numbers are clear: If you want to find work, you’re more likely to find a job in Mexico. It’s little wonder that the flow of Mexican immigrants has largely stopped in recent years.
What about government debt? Here, too, our numbers aren’t worthy of a developed market. While U.S. government debt is expected to check in at 83.7% of gross domestic product in 2012, Mexico’s debt-to-GDP ratio is less than half of that at 39.8%.
We also take a backseat in terms of economic growth. Mexico’s economy is expected to grow 3.8% in 2012, 1.7 times the United States’ 2.1%.
Investment as a percent of GDP? It’s Mexico again, 24.9% to 16.2%.
Not surprisingly, given our low savings rate, Mexico also has the edge in savings as a percentage of GDP: 23.9% versus 13.1%.
Export growth, government spending as a percentage of GDP, and current account balance also favor Mexico.
There certainly are areas in which the United States has the edge, most notably in inflation and per capita wealth. And there’s little doubt that much of Mexico’s economic success is due in no small part to its proximity to the U.S market. Drug-related crime also remains a major obstacle for Mexico. But the numbers tell a story: By many measures, Mexico is eating our lunch.
Would I move to Mexico? Not on your life. And although my kids aren’t old enough to vote, I’ll be taking them to the polls with me this afternoon so they can see what it means to be a U.S. citizen. But no matter what box you check today, the relative strength of Mexico’s economy is a stark reminder of what lies ahead for the United States.
The opinions contained in this column are solely those of the writer.
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