Warren Buffett isn't one for sugarcoating, but when it comes to America's future, he's got a message that'll make you sit up: things are looking good – really good. In a 2018 piece for Time Magazine, the Oracle of Omaha clearly shows why optimism about the next generation isn't just wishful thinking – it's math.
"I have good news," Buffett began. "First, most American children will live far better than their parents did. Second, large gains in the living standards of Americans will continue for many generations to come."
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That's classic Buffett: bold, direct, and deeply rooted in facts. He acknowledged that Americans are increasingly skeptical about their kids' futures, blaming slow GDP growth and widening inequality. But Buffett's response? Perspective – and a little arithmetic.
Buffett broke it down:
Population Growth: The U.S. population grows about 0.8% a year, a mix of births, deaths, and immigration.
GDP Growth: Even if GDP grows by just 2% annually, that translates to 1.2% growth in per capita GDP.
While that number might seem underwhelming, Buffett flipped the script. "In 25 years – a single generation – 1.2% annual growth boosts our current $59,000 of GDP per capita to $79,000," he wrote. "This $20,000 increase guarantees a far better life for our children."
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So, how's it tracking so far? Buffett's 2018 projection anticipated a per capita GDP of roughly $64,000 by 2024. Currently, the U.S. is on course to meet – and even surpass – that target, with the GDP per capita expected to hit $66,451 by year's end. This upward trajectory suggests Buffett's math was not only sound but possibly conservative.
The Power of Innovation
Why is Buffett so confident? Two words: innovation and productivity. He pointed to the progress he's seen since his birth in 1930:
"Today my upper-middle-class neighbors enjoy options in travel, entertainment, medicine, and education that were simply not available to Rockefeller and his family," Buffett wrote. Even the richest man in the world back then couldn't buy the everyday comforts we take for granted now.