Futures America

The Selling of America 

The United States is a country in trouble.  The transfer of wealth from this country to others, many of which are not friendly to our democratic principles, has not been witnessed in the history of humankind.  The rate at which the country is piling up its foreign and domestic debt, losing export manufacturing capacity, and increasing its cumulative trade deficit is simply staggering and cannot be sustained by any advanced nation.  This coupled with the linked and ever increasing costs for the social welfare programs to help feed and care for American workers and their families that have been adversely impacted by the loss of the manufacturing and other jobs is also not sustainable and will invariably lead to economic collapse of the federal safety net for those truly in need and eventually the government itself if allowed to continue.  The numbers to support this are equally staggering.  Over 42,400 American manufacturing factories have closed since 2001 with more than 5.5 million American manufacturing jobs lost since October 2000 alone.  Today fewer than 12 million Americans now work in manufacturing, the lowest number since 1941.  And the cascading impact of the loss of these jobs across all other sectors of our economy is equally destructive. 

Although Futures America provides educational information on all facets of our society, no area is more critical to our nation’s future than this ongoing financial and consumer manufacturing collapse.  If allowed to continue, the nation as we know it and the freedoms we currently enjoy will cease to exist, as foreign governments and their economic interests in this country increasing dominate and dictate our nation’s future.  Changing the current direction of our country will be one of the hardest struggles ever faced by our nation and its citizens.  In its own way this situation is equal to the challenges of World War II for our parents and grandparents. It is truly thechallenge for our generation.

The causes for the current situation are many and will be discussed in this and other articles.  They include greedy businessmen and corrupt politicians, foreign nations and their interests, and national policies that benefit others outside this country to the detriment of our own citizens, among others. The current situation, an accumulation of years of poor and corrupt leadership in Washington, misguided national interests, and the me-firstattitudes of many of our contemporaries, has led us to this critical point.  It is literally death by a thousand cuts for our country and its future. 

The loss of manufacture capability for consumer goods.  Although many things have contributed to the current situation in this country, no area is more important than the loss of U.S. consumer product manufacturing capability.  This is evident in every store across the country where manufactured consumer goods are sold.  Walmart, Target, Shopko, Best Buy, Home Depot, Bed, Bath, and Beyond, and the list goes on and on.  Simply trying to find any Made in the U.S.A. consumer manufactured item in these stores is increasingly difficult and in many cases impossible.  And the reason is simple, these items are no longer manufactured in this country.  In 2008, for example, 1.2 billion cell phones were manufactured worldwide.  None were made in this country. Manufacturing employment in the U.S. computer industry is lower today than it was in 1975. Electronics, toys, sports equipment, clothing, and other items that Americans purchase every day are no longer made in this country.  And, not surprisingly, the numbers are reflected in the annual U.S. trade deficit that exceeded $559.9 billion in 2011 alone, with $295.5 billion going to Communist China ($103.9 billion U.S. exports versus $399.4 billion Chinese imports), a country that does not share our democratic traditions or beliefs.  And the trade deficit with China over the past 10 years has exceeded $1.9 trillion dollars, the largest wealth transfer from one nation to another per comparable period in the history of mankind. 

Since the mid 1980s, the United States has had a growing deficit in tradeable goods, especially with Asian nations, primarily with China and Japan,which now hold large sums of U.S. debt that has funded the consumption.  And since China entered the World Trade Organization (WTO) in 2001, the extraordinary growth of U.S. trade with China has had a dramatic effect on U.S. workers and the U.S. economy. What we have witnessed with the growing trade deficits is thatwealth-producingprimary sector jobs in the U.S., such as those in manufacturing and computer software, for example, have been increasingly replaced by lower paying wealth-consuming jobs such as those in retail and the government sector.  And, although politicians and others tell us all jobs are equally important, reality is they are not. For a nation to grow and its citizens to prosper, it must make something that is tangible and tradeable.  If you desire your nation to be agrarian based, then focus exports on agriculturally grown commodities.  If you want it to be technologically advanced and based, then focus on making technologically based items. Although important in their own way, service industry and government jobs generally are not based on tangible products that can be exported and therefore are thought of as wealth consuming jobs.  And since 70% of the current U.S. economy is based on consumer consumption rather than products that can to be marketed overseas such as manufactured goods, the end result is an increased lowing of aggregate income for the large majority of workers and spiraling debt. Simply, nations that provide goods for those consuming them become ever wealthier.  And they have increasing amounts of money from this trade to loan to those consuming nations and their citizens to keep them buying their goods.  The end result is not only massive trade deficits, but also massive national debt as the consuming nations increasingly must pay ever higher social welfare costs of supporting their under or unemployed citizens.  Not surprisingly, today Communist China holds over $1.244 trillion in U.S. debt and Japan $997 billion.  Other Asian nations also hold significant U.S. treasury debt. Taiwan-$150 billion; Singapore-$67 billion; Thailand-$55.9 billion; S. Korea-$37.8 billion; India-$35.5 billion; and Malaysia-$14.4 billion.  Even Mexico, a country we often think of as a poor southern neighbor holds $26.8 billion in U.S. treasury debt.

Perhaps a better way to understand the cost of service versus manufacturing jobs is to look at some of those in the government sector.  Let’s start with defense as it is vitally important to the security of our country.  For over the past half century the United States has developed a world-wide capability to project power to defend our national interests and security.  This included purchasing intercontinental ballistic missiles, nuclear submarines, jet planes, troop carrying ships and planes, plus overseas basing and the considerable costs associated with this.  While providing their desired end state of security, each system and service member must be paid for and costs citizens and businesses through higher taxes and produce no tangible consumer related and sellable goods.  Deploying aircraft carriers, planes, and troops around the world costs money, and a lot of it.  But, on the positive side, we are safer.  In an ideal world a country should not have to spend extravagant sums to be safe and instead use that money to develop infrastructure to produce things they can sell on the international market, thus creating wealth instead of consuming it.  And some nations have done this through the good graces of the American public.  Japan and South Korea, among others, are examples of countries that have benefited from living under the U.S. defense umbrella while themselves subsiding industries that destroy American manufacturing jobs.  Instead of paying for large carrier battle groups to patrol the world, Japan uses those dollars to improve its economic position for its exporting businesses such as Toyota, Sony, Honda, Canon, Subaru, Nissan, Mazda, Mitsubishi, and others.  South Korea’s export market has boomed while living under this umbrella and has put countless numbers of U.S. competitors out of business. Samsung, LG, Hyundai and others’ manufactured exports are booming and in many cases increasingly dominate their respective international Markets.  Zeneith, the last U.S. manufacturer of televisions, was purchased by a Korean firm. Similarly, other government positions consume not create capital. Many are important, but for a society to be prosperous their numbers should be limited to those necessary to provide truly necessary services.  Certain other private sector service jobs are also necessary to facilitate the flow of a nation’s commerce. Someone must make loans, work the counters at our box super stores, help prepare our taxes, and even flip hamburgers. These jobs essentially are passers of goods and money, meaning someone makes a dollar here and then passes it to the next person in the service sector that passes it on to someone else. Important in a consumption based society, but a closed circuit dead-end for overall wealth generation for a nation.  As soon as this group reaches out to purchase an item outside their service chain and the country without a corresponding delivery of tangible goods, aggregate wealth is lost to the country. Compound this by millions, even billions of transactions every day, and the wealth transfer from one nation to another is significant.  People in the consuming nations often feel very good in the near term about this situation.  It’s like a sugar highor even drugs. However over the longer term, as their respective wealth and job prospects decline in respect to the producing nations’ populations it is a disaster.  This is the situation in America today. And the situation feeds upon itself. The fewer good paying jobs, the less consumers have to spend on overseas manufactured consumer goods. Since their ability to pay for these goods declines over time as the producing nation’s population becomes wealthier, then the consuming nation’s population must borrow money to buy these items. Since the producing nation now has lots of the consumer’s money to loan and use for other purposes, they are only too happy to loan the money to the consumers so they can buy even more of their goods. This cycle will continue until the consuming nation and its citizens are so far in debt they can no longer borrow enough money to buy these items. Unfortunately by that time, the producing country will hold staggering amounts of consumer nation debt and the technological infrastructure to ensure it’s paid.

What can we do? This is truly the challenge of our time.  Most Americans feel powerless to affect change.  Even if they want to buy American for example, there is nothing Made in the USA in the stores to buy. When we ask what can we do, further understanding the dynamics of why there are no American made items in the stores is important.  And not surprisingly there are numerous contributing factors, all of which need to be addressed for these goods to reappear on the shelves.  So let’s begin the review.

First let’s look at the business side. Businesses exist in America today to make money.  This may surprise many, but that’s the fact of the matter.  People take risks, put up capital, invest their sweat and blood, and expect to be rewarded for this.  It’s the American way and dream.  And business in America today is competitive.  If I can sell something cheaper than you can, I will make more money, draw more investments in my business, increase market share, and make even more money. The unsaid desire of every competitive small and large business is to own their respective market. If they can destroy or own all of their competitors it would be a good day.  That’s the free enterprise system that helped build and shape America as we know it.  And there’s absolutely nothing wrong with this.  Coupled with this free enterprise model is a parallel system if you will that supports the infrastructure that allows the free enterprise model to work.  This includes the government and others that provide the security, roads, and other infrastructire that support and allow the citizens and businesses to prosper.  In a simple closed-circuit model there are those making things, selling things, and investing and managing the wealth generated. And those that do any of these better than others are rewarded by additional mar

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