- The U.S. outgrows the eurozone after every adverse shock. It was this way after 2008 and it is happening again post-COVID.
- The underlying reason is a structural deficiency: absence of fiscal union. Fiscal union will require hard compromises on debt and fiscal transfers.
- Without such compromises, the eurozone is heading for Japanification, where high debt is sustainable only thanks to central bank yield caps.
This also falls flat in my eyes. If we are talking about structural differences, the US having moved to be a net energy ressource exporter in a global environment where energy prices increased because of sanctions against major energy exporters like Russia and Iran, that is an easy driver of the economy.
Also the debt analysis just shows that the US financed more of its economy boost with debt. This seems to be the main argument for Europes comparative underperformance, but even if we had a fiscal union, countries like Germany are politically against taking on debt and investment. This problem needs to be resolved politically, probably by Germany hitting a hard recession with its self imposed austerity. It won’t solve with a fiscal union.
Finally looking at figure 2 GDP per Capita evolution
it shows that the 2011 debt crisis drove the first difference, but after that the growth was similar until Trump took office and then it changed big time with Covid and the Russian invasion of Ukraine. This brings us back to your point about energy prices. It also begs the question how much of the US growth is fueled by its military industrial complex on the one hand and how much comes from externalizing production costs by polluting the environment more.