Why is the United States Rich?

10 Myths Exposed

by Thomas Metz

Bettencourt Publishing Ltd., May 2021
Soft Cover, Hard Cover and Kindle, 167 pages

This book exposes ten myths about our economy. In an entertaining style, it asks: Is the economy a machine? Does spending drive the economy? How big are profits? Does growth help the poor? How do the rich recycle their money? It clarifies the reasons that the U.S. is a wealthy country. Why do we have a high standard of living? What do we do that other countries do not?

America’s economy is a dynamic and constantly evolving ecosystem. It is not a machine that can be “jump-started.” Our economy is comprised of millions of Americans producing things, buying and selling things. The economy is not a fixed pie in which one person succeeds only if another person loses. The pie keeps getting bigger. Our economy is growing with many new products, new services and new innovations.

Production drives the economy, not consumer spending and not demand. The myth that demand drives the economy is false. Consumers are not a special type of economic actor; every consumer is a producer. Demand is created by entrepreneurs inventing new products and services. There is no demand for a product before the entrepreneur invents it. What was the demand for the iPad before Steve Jobs invented it?

We go ashore to Robinson Crusoe’s Island in one chapter to learn why money does not make an economy go. Robinson can print all the money he wants, but the castaways producing things is what drives the island’s economy.

Profits are misunderstood and profits are much smaller than people realize. Profits are important; they mean that value is being created. Profits lead to more jobs, higher wages and lower prices. Profits open the door for investment and they are the foundation for growth and innovation.

Markets are not complicated. Markets are simply people connecting to buy and sell products and services. Markets are not good or bad. Markets do not have morals. Those are human traits. Competition brings us marvelous benefits—higher quality, lower prices and a multitude of choices. Competition promotes higher wages and it is the mother of value creation.

Growth dramatically improves our standard of living. People take our growth for granted. Innovation and progress lead to better jobs and higher incomes. A growing business provides its employees the opportunity to develop and flourish. Growth helps the poor; more jobs are available for those with limited skills, often those with lower incomes. The opposite of growth is stagnation and decline.

All growth is fueled by investment. Investment is required to start or grow almost every business. Investment is the source of all innovation, job creation and growth. Investment comes from savings and savings is a very good thing.

America has a higher standard of living than almost every country. The average wage in the U.S. is higher than that of workers in Europe. America is the most productive country in the world. Why is the United States rich? Wealth comes from imagination combined with discipline and hard work. It is generated by people starting and building successful companies. Of the 400 richest Americans, 67% became wealthy through their own efforts by starting and building companies.

Entrepreneurs are the driving force of the economy. They take the risks and create innovative new products and services that improve our lives. We value fresh ideas and innovation. Entrepreneurs create all the companies in America and all the jobs in America. They are the source of America’s wealth. Americans embrace achievement, individualism and individual freedom. America’s culture of risk-taking sets us apart.

Entrepreneurs thrive because the U.S. embodies economic freedom—the freedom to innovate, to try and to fail. Economic freedom means that people are free to work, to produce, to consume and to invest however they choose. Creating value is how we advance as a civilization. Our entrepreneurs and our economic freedom make the United States a wealthy country. We should appreciate our high standard of living and our freedoms. Let’s not take them for granted.