"Living Comfortably" in Europe?

From the Dallas Morning News this weekend: “Germans live comfortably spending much less than Americans“.

The story’s author, Jim Landers, interviewed Raoul Wintjes, a Lufthansa employee who spent two years living and working in the DFW metroplex. Wintjes was amazed at the amount of money that Americans spend at restaurants, and with our penchant for “shopping to shop,” rather than simply going to the market or the store to purchase a specific item.

The story also provides some interesting statistics to compare the spending habits of Germans and Americans:

Germans live comfortably spending much less than Americans. In 2007, the average Dallas household spent $54,334 for housing, transportation, entertainment, you name it. That same year, German households spent just less than $34,000.

… Households in the Dallas-Fort Worth area spent $2,559 on gasoline and motor oil in 2007 – the most recent year available for comparative data from the German and U.S. governments. In Germany, the consumers living in an average household spent $1,447 to fuel their cars.

Dallas households spend a lot more on dining out – $2,662 a year in 2007. In Germany, it was $1,266.

But are Germans really “living comfortably” while spending 40% less than Americans? The answer would appear to be “no.” If you read all the way through to the very end of the story, it turns out that Germans are very nervous about their financial security after they retire. Which is interesting, considering that Germany is one of the European states that supposedly provides “guaranteed everything” to its citizens.

Germans pay a VAT of 19% and have a “tax wedge” (the percentage of a family’s income lost to taxes) of about 40%. Yet Germans still save over 16% of their income, compared with around 5% here in America. Wintjes explains, “What we have that you don’t have is the demographic disaster. Within 20 years, most of us in Germany will be in our 60s and 70s … If you cut taxes, they’ll save more.”

I think it’s pretty fair to conclude that Germans are not wise and morally superior world citizens who derive satisfaction from voluntarily consuming less while saving more. They are forced to consume less and save more because, despite the enormous amount of money taken from them by the government, they have little faith that the government will be able to meet the financial obligations that it has promised them. It should also be noted that Germany has a very strong export economy. Germany would be in even more dire financial straits if not for the stronger consumer spending of its export partners … like the United States.

Way to go Germany. If this is the kind of “hope and change” we can expect from the Democrats’ vision of Big Government, then count me out, please.

Ask Dan Benishek
The giggling Swiss finance minister