What if Europe were the United States? is a question we've played with often
on this page, at a safe distance from the crisis across the ocean. Far
from a frivolous query, it helps us unpack the difference between a
monetary experiment (their euro zone) and a true monetary and fiscal
union (our "dollar zone"). The United States has plenty of intractable
problems. Deciding whether to keep paying Medicaid for Mississippians
after the state has a particularly disappointing year, or century, isn't
one of them. Where we have laws and permanent transfer programs, Europe
has debates over backstopping bonds and trading month-to-month bailouts
for promises of fiscally ruinous austerity.
In short: If you want to understand why Europe looks like Europe, it can help to look at the United States.
This analysis from the Wall Street Journal brings color to the comparison by matching the size of U.S. metro economies to the size of European countries. I did not realize until today that the greater New York City economy was essentially the size of Spain; nor that Los Angeles was bigger than Switzerland; nor that Boston-Cambridge was larger than Greece.
The euro zone as a whole is about $17 trillion, according to the IMF,
which makes it about 13 percent larger than the U.S. That means that
Spain's share of the euro zone's economy (8.2%) is almost precisely
equivalent to New York's share of the U.S. economy, when you include
NYC's periphery in Northern New Jersey, Long Island, and parts of
Pennsylvania. A useful analog when you hear stories about Spain's impending doom.
In short: If you want to understand why Europe looks like Europe, it can help to look at the United States.
This analysis from the Wall Street Journal brings color to the comparison by matching the size of U.S. metro economies to the size of European countries. I did not realize until today that the greater New York City economy was essentially the size of Spain; nor that Los Angeles was bigger than Switzerland; nor that Boston-Cambridge was larger than Greece.
The euro zone as a whole is about $17 trillion, according to the IMF,
which makes it about 13 percent larger than the U.S. That means that
Spain's share of the euro zone's economy (8.2%) is almost precisely
equivalent to New York's share of the U.S. economy, when you include
NYC's periphery in Northern New Jersey, Long Island, and parts of
Pennsylvania. A useful analog when you hear stories about Spain's impending doom.
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