How can the US expect the economy to grow when production and manufacturing jobs continue to go overseas?
Domestically, the United States produces little, off shoring has seemingly consumed companies based in the US and has turned them into multinational companies who make their products in other countries. The only legitimate way to pay back debt or have a viable economy is to have exports through manufacturing and production to offset the debt and seemingly unlimited consumer spending. If foreign countries were to take away our ability to import or borrow money the economy would collapse tomorrow and there would be an enormous amount of money with an extraordinarily small amount of goods which would create a hyperinflation scenario. The monetary policies we have now of expanding the money supply with 0% interest rates is also very dangerous for inflation down the road. All this stimulus money, hundreds of billions of dollars, in my opinion, should go all around the country into creating new factories and the tools in the factories to create products through mass production. In my view, country has to go back to a sound base of economics, saving its money, exporting products and natural resources to pay back the trillions of dollars of debt, not relying on other countries for their products, raising the interest rates quite a lot and only allowing reasonable loans, and cutting government spending quite a bit. Of course, this would force the country into a recession which everyone seems to want to avoid right now. Also, the argument that we shouldn't produce and that we are no longer in the industrial revolution is not a good one to make, China and India are and they are doing much better then the US at the moment. I didn't do it!: Inevitably, the US will need production and manufacturing to stay a prosperous country. By the way, Hoover actually had several plans to get the economy moving again through stimulus projects through cooperation of business and government. If the US continues to simply give devalued dollars out for goods, one day, other countries won't accept dollars anymore and then we will be stuck with no domestic production and manufacturing base along along with not being able to import items. Taxes definitely should not be raised, government should simply cut spending on all programs, limit the government's size immensely and not dish out free money to anyone who asks. I don't believe in protectionism but the US should be negotiating with other countries on allowing for the creation of factories inside the US for exporting goods so that instead of just giving countries dollars for their goods, we can give them something real and of use. In response to your edit: Government should not attempt to restore consumer confidence at the moment, people need to save their money, the printing presses should not be running right now at the speed in which they are, loans should be contracting. The recession is meant to provide the balance to the decade to 2 decade long massive consumer debt spending that went on through the housing bubble under the guise that home prices would keep going up forever. All of the debt that was racked up needs to now be balanced and yes, it will be extremely painful for the economy, but it is needed to get rid of the problems we currently have. Printing money and asking people to spend the printed money will not get the economy back on track, in fact, it will continue to worsen the fundamentals through piling on more debt with less and less of a way to pay off the debt in any reasonable way. Ultimately, the US, in my view, will be competing with Asia through manufacturing again. In Asia, goods will continue to be made at cheap prices and salaries should continue to gradually increase as productivity increases and goods can be made better, faster, and more efficiently. It is productivity that increases the legitimacy in raising salaries, as you mentioned even, higher skilled jobs that increase productivity relating to specific things, but we still need the basics of manufacturing goods, that hasn't went away, it has just been shifted to foreign countries.
Asked By: interdependent globalized world - 6/14/2009
Best Answer - Chosen by Asker
This sounds very close to the economic policies of the Hoover government which resulted in the Great Depression: after the economy went into a recession, the government increased the taxes to over 50% to reduce the budget deficit, it reduced the money supply and introduced protectionist measures to protect the domestic... More
Answered By: I didn't do it! - 6/14/2009
Additional Answers (1)
Manufacturing is about 25% of US employment, and it was declining for the past 30 years. The rest is service and high-tech industries, and they will pick up the slack... More
Answered By: Just did it! - 6/14/2009
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