America is Wealthy But it Doesn't Feel Like It

America leaves me wondering - why doesn't it feel as affluent as it is? Traveling abroad sharpens this observation. In Europe, where wealth per capita trails behind the U.S., things don't seem poorer. This sentiment is echoed by many travelers. America, despite its staggering GDP, struggles with a wealth that's elusive in its everyday experience. It is both perplexing and intriguing. I’m not alone in wondering about this.

This is America, an economic powerhouse.

The United States stands with a 2022 GDP of $22.7 trillion, overshadowing the combined economies of Germany, the UK, France, and Italy. Per capita, Americans average $68,000, doubling the EU's average. American wealth per adult is a staggering $505,000, far surpassing Europe's.

With a median household income of around $68,000 and a stock market capitalization exceeding $50 trillion, the U.S. dominates financial sectors. Its real estate market, valued at over $50 trillion, dwarfs the UK's $9 trillion market. Holding nearly 30% of global wealth, America's economic might is disproportionate to its 5% share of the world population.

And even the new generation is richer than the previous one

7 Reasons Why America Doesn’t Feel Rich

1) Many American Cities Suck.

Quit frankly, most American cities aren’t nice. And the ones that are (Boston, NYC, San Francisco) are incredibly expensive, you need millions of dollars to own a home. When we think about wealth we think of a place with beautiful cities. Cities and wealth go together in our mind. But America isn’t about great cities

Americans abandoned their cities after World War 2 and built the greatest suburbs in the world. But no one ever goes into the suburbs except for people who live there. So it’s hard to actually see American wealth because downtowns look like this. Maybe that will change in the future.

Even lower tier cities in Europe like Toulouse or Gdansk look pleasant and full of life. And the cities are nice, like New York cost A LOT of money to live in. Way more than someone who considers themselves middle class.

2) High Labor Costs.
Who really has help at home these days? Picture this: a cleaner, a nanny, weaving through the halls of your house. It's a luxury, even for those hauling in six figures. They don't have it.

Then there's the cost of skilled hands — a plumber, a lawyer, an electrician. Each bill, a little reminder: America is a land of high wages. Hiring help isn't just a transaction; it's a big price tag.

In America, high labor costs shape the way we build, the way we create. Every industry, laser-focused on trimming labor hours, scrimping on costs. Gone are the quaint, labor-intensive traditions of countries with lower wages.

Ornate workmanship costs time and money, but minimalist boxes can be created for much cheaper.

This even extends to public transportation. It costs a lot to build now. There isn't dirt cheap immigrant labor like there was in the early 20th century when America built all the subways.

Services being expensive means less nice stuff, means things look worse and wealth isn’t reflected in our environment as much as it should.

3) The Diderot Effect.

Americans buy a lot of stuff and are constantly upgrading their homes. This causes a chain reaction. This phenomenon is known as 'the Diderot Effect,' a term crafted by anthropologist Grant McCracken, inspired by an essay from 1772 by the French philosopher Denis Diderot, titled "Regrets sur ma vieille robe de chambre" or "Regrets over my old dressing gown."

Diderot reveals how a single lavish purchase – a scarlet silk robe to replace his worn dressing gown – triggered a relentless cycle of consumption. The luxurious robe made the rest of his possessions seem drab in comparison, sparking a series of upgrades: a straw chair was swapped for a Moroccan leather armchair, a modest desk for an elegant writing table, simple artworks for expensive prints and brass sculptures. The aim was to achieve a certain aesthetic harmony in his home, driven by the new robe's splendor.

Diderot laments in his essay, "I was absolute master of my old dressing gown, but I have become a slave to my new one…" He cautions against the lure of sudden wealth.

Americans are obsessed with renovations. Think about your kitchen. Once you upgrade and your home gleams with a brand new kitchen, the rest of your house will subtly pale in comparison. This gleaming addition becomes a catalyst for more spending, sabotaging your earnest efforts to reduce your mortgage. The domino effect begins: new carpets and sofas, an upgraded shower room, and lavish curtains. Consequently, you will view their once-acceptable bedrooms as drab relics of the past, leading to countless weekends lost in a maze of fabric samples and debates over thread counts.

4) America Becomes Mad Max Beyond Thunderdome if You Drop Economic Classes

America is a place with a lot of socio-economic classes. You and your wife can be comfortable living like this

But if you get fired, or have some medical emergency or bad luck happens to you, you are suddenly thrown into a terrible world. Being poor in America is not a very good place to be. It starts to feel like you’re in third world country. As long as you can keep your middle class job, everything is ok.

A world of drug addiction and overdose that is mostly centered on the lower classes. 

A world of violence, jail and racial strife.

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