"We're No. 1!"
If that chant were a clue on "Jeopardy!", the correct question to match it might be: "What is: Something you never hear Americans say anymore?"
Introducing the World's Least Confident Superpower
According to a poll just out from Gallup, Americans today are less likely than at any time in at least the last two decades to agree that "the United States is No. 1 in the world economically." In fact, only 17 percent of respondents polled by Gallup think America is the world's preeminent economic power today (down from 40 percent at the turn of the millennium).
In a separate poll, Gallup showed that Americans hold a dimmer view of China's economy as well. Despite China's ranking No. 2 in the world on GDP, and nipping at our heels, only 40 percent of Americans now see the Chinese economy as a "critical threat" to America's "vital interests" today. That's down from 52 percent a year ago.
But despite Americans' modest view of our own economy currently, and our waning fears of China's, one surprising revelation drawn from Gallup's poll results is this: We may not think we are No. 1 -- but we want to be.
Reviewing data from over two decades of polling, Gallup notes that more Americans today think it's important for the U.S. to become the world's strongest economic power than at any time since at least 1993. And while the numbers have bobbled over time, this obsession with becoming "No. 1" has gained increasing strength in the most recent years, rising from a low point of 39 percent just before the financial crisis to 50 percent today. But why?
Chalk it up to complacency -- and a rude awakening from it. As Gallup notes, America has been the world's largest economy "since the 1870s." Actually being No. 1, therefore, Americans may have taken this fact for granted, and considered the rankings unimportant. And yet, just last year we lost that pride of place in at least one respect. Recent data shows that while lagging in absolute GDP, China has moved to No. 1 in GDP-as-modified-by-purchasing power parity (that's what absolute GDP can buy you at local prices).
So now, Americans are feeling the heat.
What It Will Take to Get There
So, how hard will it be for America to win back the No. 1 slot? Well, public opinion polls notwithstanding, it's worth pointing out that technically, we still are No. 1. According to data from website Statista.com, with a GDP of $17.4 trillion, the U.S. economy remains 68 percent larger than China's, and more than three times the size of third-place Japan. (In fact, to surpass America's GDP, you'd need to add fourth-place Germany to the mix: The U.S. economy is actually nearly as big as the next three largest economies combined.)
%VIRTUAL-WSSCourseInline-762%What's more, even in terms of purchasing power parity, China only has about a $216 billion lead over the U.S. -- a GDP/PPP lead of only 1.2 percent. That's about the size of the revenues of Microsoft (MSFT), Costco (COST), and Harley-Davidson (HOG) combined -- or the size of half a Walmart (WMT).
It's hardly an insurmountable gap. We can build that. Especially when you consider that the U.S. GDP grew 2.4 percent in 2014, accelerating from 2013's 2.2 percent rise. Meanwhile, in China, an apparently robust 7.4 percent growth rate was actually 0.3 percentage points slower than growth posted in 2013, missed the Asian nation's growth target (of 7.5 percent) -- and was the slowest rate of growth China has exhibited in the past 24 years.
Come to think of it, those two trends right there may explain both why Americans polled are less concerned with China as a competitor -- and more enthusiastic about eclipsing it than ever before.
Motley Fool contributor Rich Smith thinks government GDP growth statistics are all good and all -- but you can't pay the electric bill with them. He has no position in any stocks mentioned, but The Motley Fool recommends and also owns shares of Costco Wholesale. Try any of our Foolish newsletter services free for 30 days. Check out our free report for one great stock to buy for this year and beyond.
"We're No. 1!"