A recent article on American economic growth sounds absolutely dreary: “After ending 2006 lethargically, the economy is expected to remain sluggish most of this year as businesses and consumers cope with fallout from the painful housing slump,” writes the Associated Press’s Jeannine Aversa. She continues: “According to various projections, GDP growth will remain mediocre, hovering at around the 2 percent to 2.5 percent pace in the first half of this year.”

Mediocre? That’s a far cry from the Wharton business school’s description of Germany’s 2.7% growth.

If the American economy were to be 'frozen in place at 2000 levels while Europe grew,' Germany would not catch up with the U.S. in GDP per capita terms until 2015.

“The country is enjoying an economic resurgence… As recently as 2005, Germany was derided as the ‘sick man’ of Europe, with high unemployment and sluggish domestic demand, whose sole beacon of growth was exports, says Maura F. Guillen, professor of international management at Wharton… But then things began to change for the better, an improvement that was long in coming. Germany's economy—Europe's biggest and the world's third largest in terms of gross domestic product—grew by 2.7% in 2006.” Deutsche Welle joined Wharton in applauding the growth rate, going as far as to call it a “growth spurt.”

These happy murmurings reflect satisfaction with comparatively low rates of growth. Much of it is a matter of perspective: Americans have become so used to fast-paced growth that a growth rate around the 2 to 2.5 percent mark is slower than our national norm, whereas Germany’s growth has been so slow in recent years that its achievement of a 2.7% percent growth rate is hailed as an indicator of great economic vitality. It’s like a grade school teacher who gives more critical comments to the most talented student in his class than to the average student, because he judges them by different benchmarks.

Consider a remarkable 2004 report by Timbro, the Swedish free-market think-tank. Timbro researchers found that if the American economy were to be “frozen in place at 2000 levels while Europe grew,” Germany would not catch up with the U.S. in GDP per capita terms until 2015, “while Italy, Sweden and Portugal would have to wait until 2022.” The Timbro report also found that some American states are far more affluent than are Europe’s most affluent countries: “Connecticut, for instance, has almost twice the material prosperity of old European great powers like France and the UK.” Currently, Germany edges out the U.S. state of Arkansas in GDP per capita terms, but only by a hair’s thread.

Thus, even if growth were to be higher in Europe than in the United States for a few years, the prosperity gap between Western Europe and the United States, currently about 30% in GDP per capita terms, will remain almost untouched.

Jurgen Reinhoudt is a research assistant at the American Enterprise Institute.