The US economy is doing something remarkable. It is growing faster than expected, creating jobs at a furious pace and keeping consumer spending aloft despite inflation and high interest rates. This resilience has caught the eye of the UK Treasury, which is now studying the American model for clues on how to kickstart growth after Brexit. But what exactly would we be importing? A closer look at the human cost behind the statistics suggests that the American boom is laced with private pain.
On paper, the numbers are dazzling. GDP growth has outpaced Europe and the UK. The labour market is tight, with unemployment near record lows. Yet walk down any Main Street in America and you will see a different story. The recovery has been deeply uneven. Low-wage workers have seen their paychecks stretch thinner as rents and groceries consume a larger share. The celebrated resilience is often a euphemism for working two jobs, cutting back on healthcare and skipping holidays. The American Dream now costs a down payment on a starter home: half a million dollars or more in many cities. That is not a model; that is a trap.
The policies that drove this growth have been blunt instruments. Generous pandemic stimulus gave consumers cash, but also fuelled inflation. A massive infrastructure bill created jobs, but also enormous deficits. And while the Federal Reserve has raised interest rates aggressively to cool the economy, the pain has fallen hardest on those with variable mortgages and credit card debt. The winners are the asset holders: those with stocks, bonds and property. The losers are the renters, the young and the indebted. This is not a recipe for social cohesion.
Meanwhile, the UK has its own set of contradictions. The economy has stagnated, hobbled by Brexit red tape, labour shortages and a cost-of-living crisis. The Treasury's interest in American resilience may be driven by desperation, but cherry-picking the US playbook is risky. America's growth is fuelled by a consumer culture that tolerates high debt and weak social safety nets. Britain, with its NHS, generous pensions and stronger union presence, has different values. Transplanting a model built on individual grit and government largesse may simply import America's inequalities without its dynamism.
What the Treasury should study instead is the social psychology of resilience. The US economy works because Americans expect volatility and adapt. A gig worker in Los Angeles lives with uncertainty, but also with flexibility. A factory worker in Ohio sees his job disappear, then reappear in a different form. This adaptability is not a policy; it is a cultural trait honed by generations of boom and bust. Britain's post-Brexit identity is still fragile, and importing a rootless American mindset could fray the social fabric further.
Perhaps the real lesson from the American boom is humility. No model is perfect, and no country can simply copy another's success. The Treasury would do better to focus on Britain's own strengths: stable institutions, a skilled workforce and a commitment to public welfare. The path to growth after Brexit will not be found in Washington or New York. It will be built street by street, community by community, with an honest understanding of the trade-offs involved. The American economy may defy the odds, but it does so at a cost. Britain should think carefully before following suit.
