I keep getting different opinions regarding America and manufacturing jobs.
Some people say that American manufacturing jobs have dramatically dropped and are in dire danger.
Some say that, though they have dropped, how much they have dropped is vastly overstated, and we are still the top producers in the world with nothing to worry about.
Still others say that Amrican manufacturing jobs have actually increased in number.

What's the story?
From what I see around me, my inclination is to believe they have dropped dramatically, and those who claim otherwise are fudging a bit (for example, referring to American companies who manufacture more, but the actual jobs are done in overseas factories), but I simply don't know.

Can someone offer solid numbers, verifiable claims and trends and perhaps why people believe otherwise?

I keep getting different opinions regarding America and manufaturing jobs.
Some people that American manufacturing jobs have dramatically dropped and are in dire danger.
Some say that, though they have dropped, how much they have dropped is vastly overstated, and we are still the top producers in the world with nothing to worry about.
Still others say that Amrican manufacturing jobs have actually increased in number.

What's the story?
From what I see around me, my inclination is to believe they have dropped dramatically, and those who claim otherwise are fudging a bit (for example, referring to American companies who manufacture more, but the actual jobs are done in overseas factories), but I simply don't know.

Can someone offer solid numbers, verifiable claims and trends and perhaps why people believe otherwise?

Hello, Raven,

A quick search didn't bring up exactly what I wanted but I did find the employment/unemployment numbers and percentages back to 1980 here: http://www.nidataplus.com/lfeus1.htm

It shows a steady increase in employment - with a few bumps here and there - over that 27 years period.

I do realize that it doesn't directly address your question about manufacturing jobs in particular but I still think it's excellent news as far as the state of the nation goes. Also, it's important to remember that factory jobs, per se, aren't nearly as important as they were decades ago given the big changeover to automation since then. Given the fact that the population keeps growing - which means the labor pool does as well - I'd say employment is in very good shape.

Also, keep in mind - as I'm sure you are already aware - the shift away from factory jobs an into the service industries has been a fact of life for a very long time now. The vast majority of new jobs are always in the service sector.

As to your final question about why some believe otherwise, the answer seems quite simple (to me, anyway). We've always got more than a fair share of nay-sayers and chicken-littles. Far too many will quickly pounce on even the smallest bit of negative news and immediately turn it into a dooms-day situation in their opinion. Optimists and pessimists will always be going at it but the trends in the chart I just gave you clearly shows that the pessimists are mostly afraid of imaginary ghosts rather than solid facts.

I peronally DO think that the trend toward service-oriented and white collar jobs is troubling, to say the least.
I think, if the trends are correct, it speaks volumes about the stability, adaptability and longevity of our economy and the standard of life in the US.
We can't go on forever being nothing but brokers and peons who serve brokers.

I can't seem to find multiple, reliable sources that agree on the numbers, however.
One site said...
A company can only be as good as its employees. But since 1980, the number of employees in manufacturing jobs has dwindled - significantly. According to the U.S. Census Bureau, some 7 million manufacturing jobs have been lost since 1980, bringing the current number to about 15 million. In 1980, manufacturing jobs represented 21% of the 99 million working Americans; today's manufacturing percentage is 11% of some 135 million workers.
http://www.impomag.com/scripts/ShowPR.asp?RID=6625&CommonCount=0
I'd like to see the reports that information was extrapolted from, however.

I have personally seen Northern New York State get finacially crippled due to the loss of the manufacturing industry, but people say that nationally, that trend is blown out of proportion.

I am one who doesn't like to be a chicken little, and would very much like hard numbers to deal with, I just can't find unbiased (relatively, of course) reporting.

I keep getting different opinions regarding America and manufacturing jobs.

Can someone offer solid numbers, verifiable claims and trends and perhaps why people believe otherwise?

These answers should also take into account salaries, benefits and job security. Temp jobs, part time jobs just under the legal limit or company policy limit which would lead to benefits, selective firing to reduce wages and other practices have all gone up. A manufacturing job in the 60s was very different from one today.

Perhaps people who say American manufacturing is not suffering are using import/export ratios to qualify their stance. If it is manufactures in a Malaysian plant by am American company, that would look good for American manufacturing, while still decreasing manufacturing jobs.
Plus, as Read-Only touched on, with further automation, you can make more with less people.

Yes, if it is not clear yet, I am a Luddite, in the classical sense of the term. :)

I peronally DO think that the trend toward service-oriented and white collar jobs is troubling, to say the least.
I think, if the trends are correct, it speaks volumes about the stability, adaptability and longevity of our economy and the standard of life in the US.
We can't go on forever being nothing but brokers and peons who serve brokers.


I don't believe the services sector is as much "brokers and peons" as you seem to think. For example, where we had sheetmetal workers in auto plants we now have more and more people in the IT and computer servicing industry. And THE fastest growing service job field is health care - primarily hospitals: lab technicians and diagnostic machine operators.

I don't believe the services sector is as much "brokers and peons" as you seem to think.

Let me explain what I was referring to.
Either we manufacture goods and export them as a source of income, or we broker deals (buy cheap from A and sell for more to B) as a source of income.
We can make what we sell, or buy what we sell. If we buy what we sell, we are brokers.
It seems to me that if the current ideal comes to fruition (which is what I am trying to determine) then we will be resellers, bankers and investors, playing a game of chess with the workers of other nations as the pawns.
The jobs in this country will mainly be brokers and those who serve and/or entertain brokers.

Can you see where I am coming from?

Let me explain what I was referring to.
Either we manufacture goods and export them as a source of income, or we broker deals (buy cheap from A and sell for more to B) as a source of income.
We can make what we sell, or buy what we sell. If we buy what we sell, we are brokers.
It seems to me that if the current ideal comes to fruition (which is what I am trying to determine) then we will be resellers, bankers and investors, playing a game of chess with the workers of other nations as the pawns.
The jobs in this country will mainly be brokers and those who serve and/or entertain brokers.

Can you see where I am coming from?

Yes, I do see you point and concerns. But the current answer is that that we are still producing PLENTY of stuff. It;s just as you and I said - it's now done in factories that are extremely more automated than before! That's the whole key.

Yes, I do see you point and concerns. But the current answer is that that we are still producing PLENTY of stuff. It;s just as you and I said - it's now done in factories that are extremely more automated than before! That's the whole key.

I can certainly see that as an option.
Though, the economic crippling of New York I stated above was due to countless factories shutting down, nit just paring down their work force.
Though, I DO recognize that those factories could very well have been shut down because factory B in Bumbfuck, Iowa modernized, and can now produce the same product for cheaper with less employees.
That's exactly what I'd like to determine.

The question, as I see it, is:
Did they move the maufacturing from New York to Bumbfuck Iowa, or to Bumbfuck, Malaysia?

This is what I could find:

Looking back at the last five years of federal data, Kazmierczak calculated that the United States lost about 1.1 million manufacturing jobs between 2002 and 2006. The 14.1 million Americans who still had factory jobs last year earned an average of $51,425.

During those same five years, U.S. employers created nearly 5 million service-sector jobs. The 84 million Americans working in the service sector in 2006 earned an average of $40,544.


http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/09/02/BU88RSLP0.DTL

Some numbers here:
http://www.bls.gov/oco/oco2003.htm

And here:

They discuss the restructuring of the manufacturig base; losses for lowere skilled workers but improved prospects for higher skilled workers
while heightened productivity and globali-
zation have led to job losses for less-skilled U.S. workers,
they have also helped create high-skill jobs. Technology
advances promote the development of high-skill jobs in
engineering, research and development, and other special-
ized fields. Increased trade can also lead to an expansion of
these same kinds of jobs in export industries.

Together, the job-creating and job-displacing effects of
trade and technology have led to a reallocation,or restructur-
ing,of the types of jobs performed in the manufacturing sec-
tor.

http://www.newyorkfed.org/research/current_issues/ci12-2.pdf

This is what the big picture is like:
http://www.usatoday.com/money/economy/2002-12-12-manufacture_x.htm

What the future looks like, according to the group, economists and other industry watchers:

* High technology. Companies will constantly be coming up with new products and new high-tech ways to cut costs, with U.S. manufacturers leading the way. Budgets will intensely be geared toward research and development, a trend already underway.

At Kodak, a machine now mixes filmmaking ingredients with precision. Ten years ago, it took 14 workers to do the job — in the dark — a repetitive process asking for on-the-job injuries and mistakes.

Few workers are seen at all in "Building 38," which employs the highest level of technology at Kodak Park — a sprawling 1,300-acre, 170-building complex dotted by smoke stacks. Most of the people who are there watch computer screens and closed-circuit TV monitors behind protective goggles in control rooms.

* Development in the USA. Most of the innovation will still happen at home, taking advantage of the nation's highly skilled and educated workforce.
* Production abroad. Actual production of those products will likely happen in other countries. That's not just to take advantage of the lower labor costs but also to position products in global markets. For example, many U.S. companies are making or preparing to make products in China, because they expect increased demand for consumer goods in the quickly developing country as well as in other parts of Asia. Making the products closer to the point of sale reduces transportation costs.
* Fewer U.S. factory workers. Many economists believe most of the manufacturing jobs that have been lost are gone for good, especially repetitive work on the factory floor. More job losses in the sector can be expected.
* Cooperation. To quickly build technology, U.S. companies will team up to do research. Kodak, copier giant Xerox and Corning, a fiber-optics company two hours south of Rochester, along with government and area universities, are raising $300 million to build a research center that will focus on "photonics" (technology that harnesses light) and microsystems. Planners see the center as developing technology that can be used in several fields, including medical care.
* Constant education. To keep up with the rapidly evolving technology, workers will need to hit the books. "You're going to go to college the rest of your life," says R. Thomas Flynn, president of Monroe Community College in Rochester. In the past five years, the college's program that provides training for companies' employees, laid-off workers and those trying to learn a specific skill has doubled to 20,000 students a year.


Current statistics


May: Manufacturing Jobs Continue 8-Month Slump - There were 1.2% fewer manufacturing jobs than the year before, despite an increase of jobs overall of 1.5%.

April: Manufacturing Jobs Continue to Weaken - Although jobs increased 1.4%, manufacturing jobs declined 1.1% year-over-year.

March: Job Growth Is Weakening, Thanks to Manufacturing Decline - Employment increased 1.4%, dragged down by a .6% decline in manufacturing jobs.
http://useconomy.about.com/od/economicindicators/a/Job-Stats.htm

I'll try and get some figures later, but atm this doesn't sound right to me

* Development in the USA. Most of the innovation will still happen at home, taking advantage of the nation's highly skilled and educated workforce.

America does have more people getting university and other higher education degrees than anywhere else, but I thought only a small percent were in science.

America does have more people getting university and other higher education degrees than anywhere else, but I thought only a small percent were in science.

Well, there are hundreds of thousands of degrees in science and engineering awarded in the US every year. Also, the quality of science and engineering education is higher in the US than in certain other countries which churn out larger numbers of degrees. Finally, it doesn't matter that much anyway, as the smart foreigners can come to work in the US after finishing their degrees abroad. The presence of innovation industries in the US has as much to do with the business/research climate, government funding, presitgious academic posts and desirability of living here. It's about attracting the top 20% of the world's scientists and engineers, not producing the bottom 80%.

The question, as I see it, is:
Did they move the maufacturing from New York to Bumbfuck Iowa, or to Bumbfuck, Malaysia?

My understanding is that most of the downturn in manufacturing jobs was due to improved efficiency rather than offshoring. The jobs that used to be done by New Yorkers are not done by Iowans, Mexicans, Malaysians or Chinese, but rather by robots. Notice that the remaining manufacturing jobs are high-paying, high-tech positions: these are the people who run the robots that do the actual work. Business elites and politicians have, for their part, been happy to nurture the myth that it's Mexico and China that stole all the jobs, as this keeps their constituencies from noticing the truth, which is that said executives simply eliminated the jobs because they were inefficient. To the extent that jobs actually were offshored, those foreign workers that got them will meet the same fates in a few years (i.e., they'll be replaced by robots, or their jobs will move to even cheaper countries).

My understanding is that most of the downturn in manufacturing jobs was due to improved efficiency rather than offshoring. The jobs that used to be done by New Yorkers are not done by Iowans, Mexicans, Malaysians or Chinese, but rather by robots. Notice that the remaining manufacturing jobs are high-paying, high-tech positions: these are the people who run the robots that do the actual work. Business elites and politicians have, for their part, been happy to nurture the myth that it's Mexico and China that stole all the jobs, as this keeps their constituencies from noticing the truth, which is that said executives simply eliminated the jobs because they were inefficient. To the extent that jobs actually were offshored, those foreign workers that got them will meet the same fates in a few years (i.e., they'll be replaced by robots, or their jobs will move to even cheaper countries).

Do you have some evidence of this?

Do you have some evidence of this?

This one is a good overview:

http://www.cbo.gov/ftpdoc.cfm?index=5078&type=0

China is gaining strength everyday. It is only a matter of time before it takes control of Americas companies by buying them up and putting Chinese in charge.

China is gaining strength everyday. It is only a matter of time before it takes control of Americas companies by buying them up and putting Chinese in charge.


You do realize that sales of American companies to foreign entities have to be approved by Congress, right? And that Congress is, if anything, overly protective? They squashed a bid from a Chinese firm to buy an American oil company a year or two back, and only narrowly let Lenovo buy IBM's PC business.

Who owns Chrysler, why Mercedes!

Who owns Chrysler, why Mercedes!

Actually, Daimler sold off 80% of Chrysler about a month ago. It's now owned by Cerberus Capital Management, an American firm.

Not that that has anything at all to do with China.

Actually, Daimler sold off 80% of Chrysler about a month ago. It's now owned by Cerberus Capital Management, an American firm.

Not that that has anything at all to do with China.

Well, you stated that Congress won't allow any foreigners to buy American companies and I just proved that that was wrong. There are other companies owned by the Japanese, Radio City Music Hall to be exact. It is only a matter of time when Chinese will learn how to buy out American firms probably by paying off Congress, they;ll do anything for money.

Well, you stated that Congress won't allow any foreigners to buy American companies and I just proved that that was wrong.

No, that's not what I said. If you read the post in question, you'll find that I cited an example of a Chinese firm buying an American business. The point was that any acquisitions with national security implications are reviewed by Congress, and they are extremely unlikely to allow China to simply buy their way into control of America (not that they'll ever have the cash to do that). But, hey, arguing against a strawman must be very satisfying, so...


There are other companies owned by the Japanese, Radio City Music Hall to be exact. It is only a matter of time when Chinese will learn how to buy out American firms probably by paying off Congress, they;ll do anything for money.

It's not a matter of bribing Congressmen. There's a very substantial difference in the national security implications of acquisitions by Chinese firms on the one hand, and German or Japanese firms on the other. The difference is that the latter countries are long-standing treaty allies of the US who have hosted tens of thousands of American troops for decades.

Also, if you care to do your research, you'll find that American companies are investing in Chinese ones at a much greater rate than vice-versa. The whole reason China's economy is growing so fast is that they've liberalized their laws to allow foreign companies to come in and open facilities inside China. I read recently that 60% of their exports revenue comes from companies that were created by FDI (which is to say that 60% of the profits are going into the pockets of Americans and Europeans).

No, that's not what I said. If you read the post in question, you'll find that I cited an example of a Chinese firm buying an American business. The point was that any acquisitions with national security implications are reviewed by Congress, and they are extremely unlikely to allow China to simply buy their way into control of America (not that they'll ever have the cash to do that). But, hey, arguing against a strawman must be very satisfying, so... .


My statement was that Mercedes bought, awile back, Chrysler Corp. That was a defence contractor for it made the M1Abrhams tank. So why then did Congress let Mercedes buy Chrysler and their direct ties with the military back in the 1990's or so? I just wanted to point out that companies are bought and sold by foriegners all the time, I just don't keep abreast of who buys what and when. I know that England owns many firms here already.

I keep getting different opinions regarding America and manufacturing jobs.
I admit I feel some of your fear. I live in Indiana, a state with more manufactoring jobs than any other. So every time a factory closes, it pisses me off and makes me worry that the country's going to hell.

But if you look at farming for comparison, you can see that the sky is not necesarily falling.

At the time of the American Revolution, 95% of jobs were in agriculture. Now that figure stands at 2%. Yet we produce more food than ever.

As we become more efficient, we need fewer people working in a given industry. So the fact that the number of manufactoring jobs is shrinking doesn't mean we're making less stuff.

That doesn't mean we have nothing to fear. It's a global economy these days. To keep jobs in the US we need to keep taxes low and cut back on needless regulations (like that SOX monstrosity). I'd suggest cutting corporate taxes to zero. They don't pay them anyway, they just move their headquarters somewhere without taxes. Why not have them all relocate here?

Well, there are hundreds of thousands of degrees in science and engineering awarded in the US every year. That's odd. There are jobs for about 5 million total, most of these computer specialists of one kind or another. So you're talking about doubling the number of jobs every ten or fifteen years?
My understanding is that most of the downturn in manufacturing jobs was due to improved efficiency rather than offshoring. The jobs that used to be done by New Yorkers are not done by Iowans, Mexicans, Malaysians or Chinese, but rather by robots. However those jobs are being done, they are not being done in the US - many entire industries have moved offshore. Any improvements in efficiency (edit in: in these industries) happened overseas.
To keep jobs in the US we need to keep taxes low and cut back on needless regulations Right now the only way we are keeping jobs in the US is by superior infrastructure and amenities - good roads and airports, educated workforce not riddled with disease, well-enforced laws and well-run legal operations, fire departments and hospitals, zoning and environmental regulations that create attractive surroundings, etc. That is paid for by taxes. Cut taxes and these advantages go away. Then the only way we can attract jobs is by cutting wages and salaries, and allowing abuse of reources and environment. Then we live in a shitlhole.
I'd suggest cutting corporate taxes to zero. They don't pay them anyway, they just move their headquarters somewhere without taxes. Why not have them all relocate here? If they aren't going to pay taxes, why would we want them around? So they can drive up real estate prices for the rest of us?

It is perfectly possible to collect taxes from corporations.

I admit I feel some of your fear. I live in Indiana, a state with more manufactoring jobs than any other. So every time a factory closes, it pisses me off and makes me worry that the country's going to hell.

But if you look at farming for comparison, you can see that the sky is not necesarily falling.

At the time of the American Revolution, 95% of jobs were in agriculture. Now that figure stands at 2%. Yet we produce more food than ever.

As we become more efficient, we need fewer people working in a given industry. So the fact that the number of manufactoring jobs is shrinking doesn't mean we're making less stuff.


Exactly what I've been saying since my first or second post in this thread - very near the TOP of the thread.

Case in point: a particular single peanut butter factory today employs 35 people who work a 40-hour work-week. They turn out an average of just over a million jars of peanut butter each DAY.

In the past, it took 22 dozen people (that's 264) for just ONE SINGLE STEP in the process - grading out the bad nuts. Total production? Just under 35,000 jars per WEEK. There were also many other employees as well and they worked two shifts per day.

And it's the same story in every type of industry - even more so in some.

The problem with that reasoning is that the factories are closing down, not just laying off the people on the line, letting the robots do the jobs and hiring robot technicians.

The problem with that reasoning is that the factories are closing down, not just laying off the people on the line, letting the robots do the jobs and hiring robot technicians.
Well, they don't need as many factories either. Are you aware that there are more trees in the US now than at it's founding? Why? We don't need as much farmland to produce food, so much former farmland has returned to forest. The same is occuring in manufactoring.

Consider this table of total US manufactoring output:
http://www.rutledgeblog.com/Manufacturing%20Output.jpg
Or this chart of U.S. manufacturing productivity performance, measured by output per man-hour
http://www.rutledgeblog.com/Manufacturing%20Productivity%3B%20Output%20Per%20M an-Hour.jpg
http://www.rutledgeblog.com/askrutl/archives/000340.html

Or this chart of U.S. manufacturing productivity performance, measured by output per man-hour Output of what? Dollar value? That just means the low margin stuff has moved offshore - we make airplanes, fancy weapons on cost-plus contracts, etc.

We don't (in general) make shoes, TVs, tools, plumbing fixtures, toys, appliances, etc. And even the stuff that does carry "made in USA" is like as not to have actually been made in the Marianas Islands or some other free trade zone.

Some of you may recall, not too many years ago, when Wal Mart advertised that it dealt only US made products. If it had held to that policy, its shelves would be pretty barren these days. That manufacturing base is no longer on shore in the US, robots or no robots.

Output of what? Dollar value? That just means the low margin stuff has moved offshore - we make airplanes, fancy weapons on cost-plus contracts, etc.

We don't (in general) make shoes, TVs, tools, plumbing fixtures, toys, appliances, etc. And even the stuff that does carry "made in USA" is like as not to have actually been made in the Marianas Islands or some other free trade zone.

Some of you may recall, not too many years ago, when Wal Mart advertised that it dealt only US made products. If it had held to that policy, its shelves would be pretty barren these days. That manufacturing base is no longer on shore in the US, robots or no robots.

I understand what you're saying BUT my question is why does it matter to you?

I honestly don't care if it's mostly planes or whatever as opposed TVs or shoes. Why not? Because the report I linked to way back in this thread showed that unemployment has steadly dropped in the period it covered - 1980 to 2007. It's jobs that matter- not so much what KIND of job.

It's jobs that matter- not so much what KIND of job.

I couldn't disagree more.
That's the kind of thinking that makes for an unstable economy.

I couldn't disagree more.
That's the kind of thinking that makes for an unstable economy.

Not at all. As long as jobs are available, for instance in heath care as opposed to auto plants, the economy will hum along just fine.

I do understand what you're probably thinking, though. What if all our shoes and TVs are made in Asia and some event (like a war) cuts off our supply? The answer is simple - we just start making them again ourselves. It wouldn't be that difficult to start up. And it's not even a matter of a shortage of skilled labor either, since the factories would be mostly automated. Just a short delay is all that would be felt.

Not so much a war, but yes.
More like all the people in India, Malaysia and Ireland saying, "Why the fuck are we bothering with these deal-brokers in the US, when we can just cut out the middle man and do it ourselves?", and they'd be right.
That leaves us with little to offer the world.
Once oil falls out as the major factor of world power (and it will), what do we have to offer to bolster and support our economy?
What do we really export, but money? Nothing that can't be obtained elsewhere, and cheaper.
What does that make us, but redundant?

Just a short delay is all that would be felt.

I guess I am not quite as confident as you are.
It seems a massive shift to take all these people with limited or no skills (waiters, entertainers, brokers) and shift them back to manual labor jobs, skilled technicians and craftsmen.
Seems a major paradigm shift that has taken 40 years to occur "naturally" would be a simple bump in the road.
I think we should plan for such an occurrence and not depend on things staying the way they are forever.

Two things I have never been able to find in government is common sense and future planning.
We need to plan for this inevitable future, and not just react when it gets here.

Not so much a war, but yes.
More like all the people in India, Malaysia and Ireland saying, "Why the fuck are we bothering with these deal-brokers in the US, when we can just cut out the middle man and do it ourselves?", and they'd be right.
Again, I totally agree with the sentiment. This whole "service economy" boils down to "you flip my burger, and I'll flip yours". It's scary.

We need to keep America a friendly place to do business. Low taxes, reasonable regulations.

We need to focus our education system on education rather than social engineering. Who cares about the racial makeup of schools? Stop with the affirmative action, busing, and other bullshit and focus on results. Fire incompetent teachers. Get rid of tenure. Flunk kids who don't learn the material. Send trouble makers to military type schools where they will be under extreem supervision.

Balance the budget. But don't raise taxes. Cut spending. This means no socialized medicine. Stop this bullshit where a decrease in the projected increase is a cut. Freeze all government spending until the budget is balanced and the debt paid off. Outlaw all earmarks. Give the president back the line item veto.

Enforce immigration laws. Build the wall. Fine employers who hire illegals. At the same time, let in people we need! More scientists and well educated people and fewer unskilled laborers who can't even speak English. Why not give preference to immigrants who can speak English? I say there should be no limit on well educated people coming in. Get them in here fast and get them working for us!

I'm getting off topic, perhaps, but the point is that there are a lot of things we could be doing better. I don't think the sky is falling, but things could definitely be improved. And while I'm sure we disagree on a lot of the above, I'll bet we agree on a lot too. So why the hell can't we get it done?

And while I'm sure we disagree on a lot of the above
Of course.

I'll bet we agree on a lot too.
Sure.

So why the hell can't we get it done?
Answer THAT question, and I may just vote for you.

Three places you will never find common sense: Government, Religion and Corporate America.

I think we can't get it done for a lot of reasons.
We can not keep a diligent eye on public servants at the federal level in a country this huge - the focus of practical politics needs to be at the local level.
If the person who you vote and hire to represent you lives, works and cares for the community you live in, he has some accountability to the people he knows, and YOU know what is going on - as opposed to having to hear all the bullshit from talking heads on TV.
The two party systems forces people to vote for people who they disagree with on a lot of different aspects (or they have to convince themselves to pull the party line), leading to...
There are far too many politicians playing games to emotionally manipulate the electorate with so-called "wedge issues" and practical politics consistently gets swept under the rug.

As much money and power as there is in politics these days, getting the politicins to vote for things that will limit that is like trying to get a monarch to adbicate the throne.

The larger the government is, the more powerful it becomes, the less it has to answer to the peope and the less it is a real extension of the public.

Reduce the money in politics.
Force open governance.
Reduce the power of the Federal Government.
Reduce the power of the Executive Branch.
Introduce runoff voting (forcing multi-party cooperation and alliances, while allowing other parties to get their feet in the door).
Get "wedge issues" out of public governance discussion.

How does all this get done short of a revolution?
Answer that, and you will have a real following.

Not so much a war, but yes.
More like all the people in India, Malaysia and Ireland saying, "Why the fuck are we bothering with these deal-brokers in the US, when we can just cut out the middle man and do it ourselves?", and they'd be right.
That leaves us with little to offer the world.

I don't quite follow on this. They can already use as much of their domestic production as they like. Why pay for all the shipping costs overseas and back, import/export tariffs and whatever? Or or you saying we import from, say, Malaysia and then resell in Ireland perhaps? That could also be circumvented anytime Malaysia wants to build it's own factories alongside those owned by U.S. companies. Nothing but their own disinterest could prevent them from doing that today - in fact, it may have happened already (I don't see why not).:shrug:

Once oil falls out as the major factor of world power (and it will), what do we have to offer to bolster and support our economy?

How do you figure that? Oil is nothing but a drain on our economy - and that's been true for decades.

What do we really export, but money? Nothing that can't be obtained elsewhere, and cheaper.
What does that make us, but redundant?

Now that IS a good question and I don't have a ready answer right at the moment.



I guess I am not quite as confident as you are.
It seems a massive shift to take all these people with limited or no skills (waiters, entertainers, brokers) and shift them back to manual labor jobs, skilled technicians and craftsmen.
Seems a major paradigm shift that has taken 40 years to occur "naturally" would be a simple bump in the road.

Nope, no massive shift needed in the least. Let all those people you named keep on doing what they've been doing. All that's really needed is just a few skilled workers in addition to the ones that are already well trained in installing automated equipment. For sort of a side example, in one show I saw recently, it only took 48 hours of training to teach a woman who had never done it before to become skilled at remotely operating an ore mining machine. Point being that it no longer takes months to learn a skill in today's automated world. It's all been reduced to a few fairly simple things and machines take care of all the rest. Another quick example: circuit boards that used to require a lot of people placing components and making connections are now turned out buy the hundreds per hour with not a single person being directly involved. Machines mask and etch the boards, place the components, and process called something like "float soldering" makes the connections. No manual labor involved at all.

I think we should plan for such an occurrence and not depend on things staying the way they are forever.

Two things I have never been able to find in government is common sense and future planning.
We need to plan for this inevitable future, and not just react when it gets here.

I completely agree with you there. Fortunately, it's not the government that keeps a close eye on things and would see the signs of something coming like we've been discussing. Companies - private industry - does that and competition means they all want to be the first to take advantage of those changes on the horizon. You can bet they won't all be sleeping at the switch if there's even the slightest indication that our supply line of anything is in danger. Closed factories can be brought back to life with only a little delay involved. There are plenty of construction workers available in addition to the ones who install the equipment. Speed HAS become one of our most important resources in this country - and few other countries can even think about trying to catch up with us on that one!

You make some good pints, Read-Only.
Thanks for giving me some food for thought.

I'm still a card-carrying Luddite, however. :D

You make some good pints, Read-Only.
Thanks for giving me some food for thought.

I'm still a card-carrying Luddite, however. :D

I don't hold anyone's prespective against them, Raven. Well... With the exception of the die-hard woo-woos, I guess. :D:D

You're very welcome to the points and thoughts. I'm the type of guy that tries to rely on hard facts as much as possible. That's in direct contrast to some around this place that operate on emotions and anti-this and anti-that and spend their time reading nonsense sites rather than looking for solid numbers. Their main problem is that, unlike thee and me, they let someone else do all of the thinking for them. And that's a real shame.

Sadly, that's the majority of all people, not just those here.

Sadly, that's the majority of all people, not just those here.

How true! And it really IS sad - very sad indeed.

My statement was that Mercedes bought, awile back, Chrysler Corp. That was a defence contractor for it made the M1Abrhams tank.

No, Chrysler Defense was sold to General Dynamics in 1992, six years before Daimler-Benz (there is no company called "Mercedes") purchased Chrysler. All they bought was a car company, and they've since sold it back.

I just wanted to point out that companies are bought and sold by foriegners all the time, I just don't keep abreast of who buys what and when. I know that England owns many firms here already.

Yes, and any and all such sales with national security implications must be approved by Congress. Thus, China will never be able to simply "buy up America" on the sly. Not that China has anywhere near enough cash to even think about such a proposition.

one-raven,
Three places you will never find common sense: Government, Religion and Corporate America.
I think you have to add the American consumer to your list. I, as most middle class Americans, am concerned with our loss of good paying jobs in the manufacturing sector. I realize I can make little difference on my own, but I make a concerted effort to buy American manufactured goods when I can, even though the cost is likely higher. If all consumers did that instead of looking for the best 'bargains', perhaps fewer factories would close. Even then, it is difficult to determine which products are actually 'made in the USA'. A case in point: there is an underwear manufacturing plant near my hometown, a well-known 'American' brand. I learned that the underwear (men's jockey shorts in this case) were made offshore, except for the brand name labels that are on the waistband. The factory 'finished' the product by sewing on the brand name label with 'made in the USA' on it, packaged the product, then shipped it to retail stores as a made in the USA product. I suppose since a part of the manufacturing process was done in the USA, they could legally claim it was made in the USA. I don't know what percentage of the actual manufacturing process has to be done in the US to claim the product is US made, but I view that as a deceptive practice. This happened several years ago, so regulations may have changed to prevent it from happening today.

Almost the opposite can be true also. A 'import' brand name may be US made. Many import name autos and trucks are actually made in the USA by US workers for the US market. As an example, full-size Nissan pickups and SUV's are made in a factory in my state. Some of the smaller components, such as electronics, are no doubt imported, but even the V-8 engines are made in the US. The same is true for certain vehicles produced by almost all, if not all, Japanese, European, and Korean auto companies. In contrast, a Chevrolet pickup may be made in the US, Canada, or Mexico. The ones I looked at were made in Canada. I don't have a problem with Canadian or Mexican made Chevrolets, but those good paying jobs did not go to US workers.
What do we really export, but money? Nothing that can't be obtained elsewhere, and cheaper.
What does that make us, but redundant?
Food. We export huge quantities of grains, beef, pork, dairy products, etc. The US agricultural sector is very important to our economy.

I think some fail to include the many good jobs that are available in the 'service sector', thinking that is only 'MacDonalds' or the like. Good jobs can be had at FedEx, UPS, the Postal Service, city utilities, social worker positions, etc. They are more difficult to obtain and one will likely have to wait until a position is available. One may have to establish a good work history at lower paying jobs in order to prove their reliability as employees. Good jobs require extensive on-the-job training that employers don't want to waste on an unreliable worker.

Food. We export huge quantities of grains, beef, pork, dairy products, etc. The US agricultural sector is very important to our economy.

It's true that America exports a lot of food, but it's also true that, without the various protections that agriculture receives, most of said food could be produced elsewhere for cheaper. The exceptions would be stuff like premium beef, which requires corn as a feedstock. Also, for that matter, corn.

More pertinent, however, are the myriad manufactured products that America exports. This includes airplanes, microchips, turbines, industrial machinery, farm equipment, organic chemicals, pharmaceuticals, telecommunications equipment, etc. Also note that the sale of a single Boeing airplane brings in more revenue than a whole slew of Chinese toy factories.

On top of that, you can export services, and America does this in spades. Chinese toy factories need their outputs shipped to the US market? They buy the services of an American shipping carrier to do it. Malaysian firm needs accounting and management consultants to help them expand operations? Same thing.

My impression is that people think America doesn't manufacture or export anything because there's been a downturn in manufacturing jobs and a persistent trade deficit. But the downturn in manufacturing jobs reflects increases in productivity, not a downturn in manufactured output, and the trade deficit only means that we import more than we export. American exports run to $1 Trillion per year, more than any country except Germany (whom we will probably pass in the next couple of years if exchange rate trends continue).

I honestly don't care if it's mostly planes or whatever as opposed TVs or shoes. Why not? Because the report I linked to way back in this thread showed that unemployment has steadly dropped in the period it covered - 1980 to 2007. It's jobs that matter- not so much what KIND of job. So the fact that the median wage for an hourly job in the US has been dropping steadily for 25 years now doesn't ring a warning bell?

One way to get unemployment to drop is to cut wages. That's what We've been doing. Lots of jobs, and there had better be, because it takes at least two of them (or a lot of overtime) to rent housing for a family.

Chinese toy factories need their outputs shipped to the US market? They buy the services of an American shipping carrier to do it. They do?
- But the downturn in manufacturing jobs reflects increases in productivity, not a downturn in manufactured output, and the trade deficit only means that we import more than we export. American exports run to $1 Trillion per year, more than any country except Germany

If our productivity is increasing relative to others, we should be exporting increasingly more than they are, per capita. Instead, it is not, and we are not (for example, the population of the US is comparable to that of Germany, France, and Japan combined. Germany alone out-exports the US total, while paying higher wages and suppying more social services per capita).

The other problem with our declining relaltive productivity and shrinking manufacturing base is the loss of synergistic effects - new products and new ideas and new economic endeavors, or improvements in old ones, come from happy accidents mostly; and these accidents are less common in a world of less opportunity for them.

They do?

Yes. Did you think that China had railroads and trucking lines operating in the US or something?


If our productivity is increasing relative to others,

I didn't say our productivity was increasing relative to others. The point was that productivity of US manufacturing has gone up: the same outputs can be produced with less labor. Thus, it doesn't take as many jobs to do the same manufacturing. Moreover, to the extent that we've lost manufacturing jobs to overseas competitors, it hasn't been because they're more productive economies. On the contrary, they're vastly *less* productive. However, the difference in labor costs is so great that it is still more cost-effective to produce stuff in, say, Mexico or China and then ship it back here.

(for example, the population of the US is comparable to that of Germany, France, and Japan combined. Germany alone out-exports the US total, while paying higher wages and suppying more social services per capita).

You forget to mention that Germany has unemployment rates 2-3 times higher than the US, and has just undergone a decade-long slide in real wages. Because of this, Germany's internal market is weak, and so it is forced to rely on exports to sustain its economy (unlike essentially every other developed economy in the world). Moreover, those social services result in higher taxes, so the higher wages don't actually result in more take-home pay. Also, German competitiveness in the export markets has as much to do with subsidies as with productivity.


The other problem with our declining relaltive productivity and shrinking manufacturing base is the loss of synergistic effects

The manufacturing base is not shrinking. We are manufacturing *more* stuff than *ever before*. It's the manufacturing *labor market* that is shrinking. This does not indicate a contraction of the manufacturing base, but rather that demand for manufactured goods is not growing as quickly as manufacturing productivity.

It's true that America exports a lot of food, but it's also true that, without the various protections that agriculture receives, most of said food could be produced elsewhere for cheaper. The exceptions would be stuff like premium beef, which requires corn as a feedstock. Also, for that matter, corn. ....Certainly was true, but I think no longer is (thanks to the alcohol from corn programs and their new large subsidies). There have been minor riots Mexico's tortia eaters because their local corn is more expensive than what they formally could buy from the US.

...The other problem with our declining relaltive productivity and shrinking manufacturing base is [b]the loss of synergistic effects - new products and new ideas[b] and new economic endeavors, or improvements in old ones, come from happy accidents mostly; and these accidents are less common in a world of less opportunity for them.What! Doesn't the latest hair style count as "New Ideas" ;)

To Quad:
I will accept that on absolute scale manufacturing output is increasing, if you say so, but as you are one who like to normalize by dividing by GDP etc. how is US manufacturing going as a fraction of GDP? - My impression is that it is shrinking and more and more every year. I.e. greater percentage of the US population live by shining someone's shoes in exchange for them cutting their hair. etc. (figeratively speaking, not literally.)

This would, in principle, be ok if the US were a closed economy, but it is not - it needs to borrow more and more every year. How long do you think these two trends can continue? Will not the foreigners grow tired of only getting green pieces of paper for real goods? - It seem to me that they are already becoming reluctant to accept more of the US Treasury paper. - See some related facts at my new thread "Sovern Funds..." at:

http://www.sciforums.com/showthread.php?t=70867

My impression is that people think America doesn't manufacture or export anything because there's been a downturn in manufacturing jobs and a persistent trade deficit. But the downturn in manufacturing jobs reflects increases in productivity, not a downturn in manufactured output, and the trade deficit only means that we import more than we export. American exports run to $1 Trillion per year, more than any country except Germany (whom we will probably pass in the next couple of years if exchange rate trends continue).

See that's what I'm confused about...
Manufacturing jobs go down, but productivity goes up, right?

Who, other than the owners of the company and the brokers (investors), does that help?
An industry could bring $40 Billion a year into this country, but if they are hiring fewer people, paying them less, offshoring much of their manufacturing process, cutting benefits to all but the officers of the company, spending billions on marketing (which is tax deductible, so we pay for much of it) and raise their prices, how is the American people benefitting from this?
They say our economy is strong because our corporations are making money and being more productive, but well over half the people in this country have seen the salaries drop (adjusted for inflation) over the past ten years consistently.
We, for the first time since before World War II, Americans have more in debt than in savings.
With fewer and fewer skilled labor jobs, we are more expendable, and less secure in our jobs.

I could go on and on for hours (I have) but I'll spare you that for now.

Please tell me how we, as a people, benefit from this greater productivity and cost savings from the "global economy" other than simply lower prices at the register for shit we don't need, which we are less and less able to afford anyway.

Please tell me how we, as a people, benefit from this greater productivity and cost savings from the "global economy" other than simply lower prices at the register for shit we don't need, which we are less and less able to afford anyway.

The answer is lower prices on shit that you DO need. Equivalently, higher real wages, which means that you can afford MORE shit.

On top of that, a huge number of people have invested their savings in stocks, whose prices are buoyed by corporate performance. I.e., the "owners of the company" are *you and me*. This is a big reason that Americans save less than they used to: they've come to expect strong corporate performance, and so high returns on their investments. Take this away, and all of a sudden everyone has to save more and consume less, and we go into a recession due to lack of demand.

High-pay, low-skill jobs for a small portion of the American workforce (i.e., the manufacturing jobs that have been displaced) don't help anybody except the few people who have them. Everyone else ends up subsidizing them through higher prices. If you feel insecure in your job, go learn some more marketable skills.

I will accept that on absolute scale manufacturing output is increasing, if you say so, but as you are one who like to normalize by dividing by GDP etc. how is US manufacturing going as a fraction of GDP? - My impression is that it is shrinking and more and more every year. I.e. greater percentage of the US population live by shining someone's shoes in exchange for them cutting their hair. etc. (figeratively speaking, not literally.)

According to the link I posted on the first page of this thread, it has remained roughly constant since 1950 or so. Look at Figure 3 on the link. To be fair, there is a slight downward trend, but it's not what I'd call dire.

How long do you think these two trends can continue?

Well, as I just said, there is no downward trend in manufacturing. As far as borrowing: when you say "borrow more and more every year" do you mean "borrow more than was borrowed the previous year" or "borrow rather than repay?" I would submit that it's fine to continue borrowing indefinitely, and even to borrow more and more each year, provided that the growth in the debt doesn't get too far ahead of the growth in GDP. Note that the debt-to-GDP ratio today is actually smaller than it was in, say, 1995, nor is it growing particularly quickly:

http://en.wikipedia.org/wiki/Image:US_Public_debt_per_GDP_1791-2006.svg

I would submit that it's fine to continue borrowing indefinitely, and even to borrow more and more each year, provided that the growth in the debt doesn't get too far ahead of the growth in GDP. Note that the debt-to-GDP ratio today is actually smaller than it was in, say, 1995, nor is it growing particularly quickly:

You're like a breath of fresh air. It's great to see someone around here not screaming, "The end is near!"

But I must say I'm not happy with the constantly increasing debt. I think we really need a balanced budget ammendment. Something that would, say, freeze all government spending (even Medicare and Social Security) when the budget's not balanced.

Deny the geezers their COLA's and they'll make sure the damned budget is balanced pronto!

... Who, other than the owners of the company and the brokers (investors), does that help? An industry could bring $40 Billion a year into this country, but if they are hiring fewer people, paying them less, offshoring much of their manufacturing process, cutting benefits to all but the officers of the company, spending billions on marketing (which is tax deductible, so we pay for much of it) and raise their prices, how is the American people benefitting from this?. ...Quad has given a reasonable answer to how it helps, even "Joe American" provided he still has a job and no unusual expences, like medical. (He is less likey now to have any medical coverage and his new MacJob's plan is usually not as good as the plan he lost when his factory closed.) A more complete answer would at least mention the fact that Joe American is buying things made in China etc. - It is not mainly increased US productivity that has let him buy more.

Under GWB's administartion, for the first time in more than 100 years, the spread between the rich and middle class is widening. (Because of all those things you mentioned, plus reduced tax rates on the rich and their "capital gains.")* I don't have the ref just now but an index of this would be the % of all earnings going to the top 10% vs to the lowest 30%. etc. Quad is good at finding things and honest, so he I think can give the numbers on something like this.)

This economic polarization of the society is not a good trend for democracy. :(
-----------------------
*I got the max cash "give-back" check a few years ago. Like others getting that, I did not need the payment, so deposited it into my bank account rather than spend it. (Idea for the "give-back" was sold to public as way to simulate the economy! - What it did in fact was add to the excess liquidity in the banking system. That in turn helped** caused the unsustainable inflation in housing prices. That inturn make everyone think investing in house was OK even with zero down etc - and now US is in the painful process of trying to unwind this GWB stupidity favoring the rich, his most loyal supporters.)

**Greenspan also get a major share of the blame for what I have called the "6L cycle." - See my thread about that for more details at:

http://www.sciforums.com/showpost.php?p=1502039&postcount=1

Yes. Did you think that China had railroads and trucking lines operating in the US or something? No. I thought I was responding to a comment about the Chinese having to hire American shipping to get their stuff to the US.
Within the US, it's a wash - everyone uses the local shipping.
I didn't say our productivity was increasing relative to others. The point was that productivity of US manufacturing has gone up: the same outputs can be produced with less labor. Thus, it doesn't take as many jobs to do the same manufacturing. Moreover, to the extent that we've lost manufacturing jobs to overseas competitors, it hasn't been because they're more productive economies. But your conslcusion that higher productivity will bail us out depends on relative productivity. And the Germans have in fact taken manufacturing jobs from Americans by having a more productive economy - as have the Canadians, for that matter. What Germany makes and exports replaces what could be US manufacturing.
You forget to mention that Germany has unemployment rates 2-3 times higher than the US, and has just undergone a decade-long slide in real wages. Because of this, Germany's internal market is weak, and so it is forced to rely on exports to sustain its economy (unlike essentially every other developed economy in the world). Moreover, those social services result in higher taxes, so the higher wages don't actually result in more take-home pay. Also, German competitiveness in the export markets has as much to do with subsidies as with productivity. So? The US subsidizes its relatively weak exports heavily. The US even subsidizes its internal markets. The US reduces unemployment by lowering wages - in competition with Mexico, say. The Germans take home less,because of taxes ? They pay less for their lives than Americans do, because of those taxes - add what Americans pay for health care and college educations and road transport and debt service to the Americans' tax bill, for a fair comparison of "take home".
The manufacturing base is not shrinking. We are manufacturing *more* stuff than *ever before*. Entire manufacturing industries have moved off shore. More are following. Their replacements are mostly high-margin and derivative goods, completely dependent on the off shore manufacturing. We are not namufacturing "more stuff" - we are manufacturing different, and generally less, stuff. Our manufacturing base is getting to the point that can no longer support our own economy or provide opportunities for innovation (places like Finland and New Zealand are eating our lunch) - and we are not a small country, that can rely on numerous other countries to cover the slack.
The answer is lower prices on shit that you DO need. Equivalently, higher real wages, which means that you can afford MORE shit. So the fact that we are seeing higher prices on shit that we do need, coupled with lower real wages, consistently for several years now, means that the question is not answered - right?
Deny the geezers their COLA's and they'll make sure the damned budget is balanced pronto! You are going to raise taxes on the rich? Or maybe you plan to further reduce the US already inadequate delivery of governmental services.

... I would submit that it's fine to continue borrowing indefinitely, and even to borrow more and more each year, provided that the growth in the debt doesn't get too far ahead of the growth in GDP. ...I would agree with this, but want to note that there is potentially a strong and disasterous link between GDP and the increased borrowing needs: I.e. The interest rate required to persuade foreigners to continue financing the debt. They are now showing (especially their government's central banks) a recognition that buying Treasury PAPER is a way to LOSE purchasing power. For details on this, see my thread Sovern Funds..." at:

http://www.sciforums.com/showpost.php?p=1518666&postcount=1

I.e. interest rates must rise to get foreigners to buy Treasury PAPER, instead of REAL ASSETS. This is the mechanism of the "disasterous link."

As interest rate increases, the cost of new borrowing goes up linerally with the rate and of course the value of the old debt's principle drops, causing the holders to LOSE purchasing power even more rapidly, and want even higher rates to compensate when they "roll" their old US bonds into new bonds, if they are even willing to roll, instead of collect. If they decide to collect, then the US Treasury must sell even more new bonds to pay them, requiring still higher interest rates etc. This alone is a dangeous postive feed back system, but that is only one side of the "disasterous link" coin.

As the interest rates go up, the GDP goes down as business slows, people can not buy their "starter home" or "move up" etc. This also adds to the dramatic effect on the Debt/GDP ratio.

To make a simple analogy, the US has had a great time skating along while others financed their rental of the skates and few recognize that the US is already on thin ice. I can see (and have documented in several threads here) that the ice is already cracking not far from the skater. I.e.

Rapid growth of Sovern Funds as central banks get out of US Treasury PAPER, Dropping real wages, negative saving rate, factories closing, out sourcing of jobs, 12 year low in housing starts, historically high inventory of unsold homes, house prices dropping in every city in inflation adjusted dollars, London now leading financial service center, not NYC, Auto sales by Detroit very slugglish and slowing, Baby Boomers retiring and claiming their Social Security instead of paying taxes as in their peak earning years. There are many other "cracks" showing to add if I took longer to think about it. (by edit - an unending war with growing expenses)

Where would the US debt to GDP ratio be if interest rate doubles (to not even near the historic highs) and GDP drops correspondingly?

It appears to me that US is just now entering into a very disasterous positive feed back system and can do nothing about it as foreigners learn that the dollar is not a sound investment nor a safe store of wealth.

Note also I did not mention above that China has already enough reserves to destroy the dollar if it chose to, but if done now, that would be painful to China also. They must wait until their rapidly growing middle class (both in numbers as ~ a million pesants move to the cities each month and as their individual salaries rise) can buy all the output of China's factories. If they learn what credit cards are and use them their purchasing power will exceed that of ALL Americans. China will not need the US market and not continue to accept PAPER for real goods. - This will also raise the cost of living for Joe American and he will not be able to buy as many US made products. - more slowing of GDP.

I do not like any of this I see coming, but logic forces that conclusion, which is a dramatic break with the past.

No. I thought I was responding to a comment about the Chinese having to hire American shipping to get their stuff to the US.

They don't *have* to do this, but some of them do. Moreover, no matter who ships them here, they have to buy the services of an American company to unload the stuff from the ships. They also have to hire US lawyers and accountants to deal with all of the issues related to taxes, import regulations, etc.


But your conslcusion that higher productivity will bail us out depends on relative productivity.

What are you talking about? I don't recall making any conclusions about what will "bail us out." My point was that manufacturing job losses are primarily driven by gains in productivity, not offshoring. I reject the implicit supposition that we need to be bailed out in the first place.


And the Germans have in fact taken manufacturing jobs from Americans by having a more productive economy - as have the Canadians, for that matter. What Germany makes and exports replaces what could be US manufacturing.

I defy you to prove that this has resulted in a significant loss of jobs, compared to the losses driven by productivity.


The US subsidizes its relatively weak exports heavily.

How do you figure?


The US even subsidizes its internal markets.

Outside of food, I don't think this is at all true.


The US reduces unemployment by lowering wages

No, unemployment is mostly lowered by creating new jobs. US employment policy is (like everywhere else) closely interconnected with monetary policy. If enemployment is high, interest rates can be cut without risking too much inflation. This boosts consumption and lowers the cost of financing new operations, leading to new jobs, which lowers unemployment. By way of comparison, Germany has seen lowered wages *and* high unemployment for the past 20 years.


The Germans take home less,because of taxes ? They pay less for their lives than Americans do, because of those taxes - add what Americans pay for health care and college educations and road transport and debt service to the Americans' tax bill, for a fair comparison of "take home".

Not sure where you're going with the road transport and debt service parts there. But even if the taxes they pay, on the average, result in offsets to expenses, Germans still come out behind. Why? Their economy is much less productive. The per-capita GDP, measured in PPP for Germany is $31,000 per year. In the US it's $43,444. It's true that a lot of the difference is due to America having a larger workforce, and working longer hours, but that just hammers home the point that the burden on a given worker (be it through taxes or direct expenses) is much higher in Germany. They'll one of the oldest populations on the planet.


Entire manufacturing industries have moved off shore. More are following. Their replacements are mostly high-margin and derivative goods, completely dependent on the off shore manufacturing.

So what?


We are not namufacturing "more stuff" - we are manufacturing different, and generally less, stuff.

The dollar value of the stuff we manufacture has gone up. You can insist that building one plane is "less" than building 1000 toy trucks, but I'm not impressed.


Our manufacturing base is getting to the point that can no longer support our own economy or provide opportunities for innovation (places like Finland and New Zealand are eating our lunch)

Ridiculous. America is the innovation capitol of the world. Top engineers and scientists from around the world are beating down the door to get here, and you're worried that we've moved some old auto-parts and toy factories to China? Just in the last decade we've sequenced the human genome, increased the speed of computers by two orders of magnitude, spawned countless new online businesses. We're hard at work on quantum computing, nanotechnology and space tourism, and you're worried about jobs that belong in 19th century Britain...


So the fact that we are seeing higher prices on shit that we do need, coupled with lower real wages, consistently for several years now, means that the question is not answered - right?

First of all, rising prices and falling real wages are the same thing, so there's no "coupled with" here. Second of all, there has not been a consistent decline in real wages. They've been *stagnant*, not declining. If you think they've been consistently declining, it's probably because the pundits who cater to your worldview make a big stink every time there's a decline in real wages, and then don't say anything when there's an increase. In fact, real wages today are slightly higher than they were in January 2001.

As interest rate increases, the cost of new borrowing goes up lineraly with the rate

Okay.


and of course the value of the old debt's principle drops,

Huh?

As the interest rates go up, the GDP goes down

It's not that GDP goes down, it's that GDP *growth* goes down. At least for reasonable changes in the interest rates. If you tripled them, that might make the GDP actually decrease, but that's not a realistic scenario.

Another thing: rising interest rates also means that inflation goes down, so the effect on GDP in real terms may be very slight, or even positive in certain cases.

Also, you're forgetting the role that Americans play in the market for treasury debt. Even if foreigners become very reticent to buy bonds due to exchange rate issues, a small increase in the interest rates will attract lots of Americans to the market (and they don't care about the exchange rate, for the most part).


Dropping real wages,

False. Real wages are stagnant, not dropping.


negative saving rate,

Inconsequential given the amount of FDI we receive. Moreover, if interest rates go up, so will the savings rate.


factories closing, out sourcing of jobs,

And yet unemployment is as low as can be expected. Who cares if people work in factories or offices?

On second thought, I care: it's much better to have them working in offices.


12 year low in housing starts, historically high inventory of unsold homes, house prices dropping in every city in inflation adjusted dollars,

Yes, the housing bubble has popped. So what? Like every other bubble, the shock will pass and we'll be left with a slew of new infrastructure. As someone looking to buy his first home, I couldn't be happier about the declining prices. If the Fed also cuts interest rates, I'll really come out ahead.


London now leading financial service center, not NYC,

Who cares? Also, you may be surprised to learn that there are financial companies in America outside of New York. Perhaps you've heard of these cities called "Los Angeles," "Chicago" and "Atlanta?"


Auto sales by Detroit very slugglish and slowing,

Again, so what? Maybe this sends chills down the spines of people who are all patriotic about auto manufacturing, but I've never owned an American car, and never plan to. If a foreign company wants to sell Americans better cars for cheaper, then everyone wins. And Subaru, Toyota, Nissan and others are busy opening new factories here to cater to that market.


Baby Boomers retiring and claiming their Social Security instead of paying taxes as in their peak earning years.

Well, if an aging population is a problem, we've still got it WAY better than the rest of the developed world. Hell, China will probably be older than we are in a couple of decades, what with the one-child policy.

They must wait until their rapidly growing middle class (both in numbers as ~ a million pesants move to the cities each month and as their individual salaries rise) can buy all the output of China's factories.

You're chasing your own tail here. The only way for China to grow its middle class if to build more factories that produce more stuff. Which means that their output never gets any closer to being affordable. They won't be able to get out of this bind until they reach a point where the have a stable middle class and can shift to a service economy. They can't simply borrow their way around external markets.

You are going to raise taxes on the rich? Or maybe you plan to further reduce the US already inadequate delivery of governmental services.No new taxes, period. Take what ever percent the government is overbudget and cut every government program, every federal employee's salary, every entitlement payment; by that amount. I'll do my part, and accept the decreased payment from Medicare on my Medicare patients.

Who cares? Also, you may be surprised to learn that there are financial companies in America outside of New York. Perhaps you've heard of these cities called "Los Angeles," "Chicago" and "Atlanta?"
Also, the fact that New York is no longer the leading financial service center is because of one stupid law: The Sarbanes-Oxley Act. It should be simple to reform that moronic over-reaction to the Enron scandal. Many are calling for its reform or repeal already.

Take what ever percent the government is overbudget and cut every government program, every federal employee's salary, every entitlement payment; by that amount. Unless you are prepared to do that with the military, you're still dealing with basically peanuts.

And you're gutting the basic services the legitimate American economy depends on.

Unless you are prepared to do that with the military, you're still dealing with basically peanuts.

The military is only 1/4 of the federal budget. There's $1.5 Trillion in non-defence federal spending every year. I guess you can call that "peanuts" if you like, but it seems pretty significant to me.

The military is only 1/4 of the federal budget. There's $1.5 Trillion in non-defence federal spending every year. I guess you can call that "peanuts" if you like, but it seems pretty significant to me.
People have this idea that the military consumes the majority of our budget, and they couldn't be further from the truth, as you noted. Of course, in my opinion, the military should consume most of the federal budget as it is one of the few legitimate constitutional areas of federal action.

Does anyone know by what percent the government is overbudget? The only figures I could find were for % GDP.

Does anyone know by what percent the government is overbudget? The only figures I could find were for % GDP.

The budget deficit is about $250 Billion this year, which is to say that they're spending about 12% more than they're taking in in taxes. Notice that the budget deficit has been shrinking rapidly over the past few years:

http://www.uuforum.org/deficit.htm

...Huh?{responce to my statement that the value of the old debt (bonds) goes down as interest rates rise} You surely know that a $10,000 face, 6%, 30 year bond willl sell in the market for about $5,000 if the interest rate on new bonds becomes 12% as only then are both equally attractive to the buyer I.e. earnings are the same, except 30 years later he can get $20,000 by buying two of the now half face value 6% bonds instead of one of the 12% bonds with the $10,00 he has available to invest. This diference of delayed payment, discounted to present value at 12%, does make the pair of 6% bonds a few hunderd dollars more valuable than one $10,000 12% bond, but I am sure not worth $6,000 to the buyer. That is all I stated - there is in this example a drop in value of the old Treasury debt by more than 40% of the original price paid for it.

...It's not that GDP goes down, it's that GDP *growth* goes down. At least for reasonable changes in the interest rates. If you tripled them, that might make the GDP actually decrease, but that's not a realistic scenario.Your opinion, but note rates have been 3 times higher and that when everyone still had confidence in the dollar!

...Another thing: rising interest rates also means that inflation goes down, so the effect on GDP in real terms may be very slight, or even positive in certain cases.No, that is exactly backwards. Almost all modern central banks (even Brazil) now use "inflation targeting" to set interest rates (asuming they have control over them, which is getting to be very questionable in US with its need to borrow more every year.) I.e. when inflation rate is going up, rates go up to stem the volume of sales on credit. Thus interest rates and inflation both go up (or down) together. Have you not read any of the nearly uiversal cries of Wall Street to the FED almost demanding that the FED cut rates because the GDP / economy is growing "soft"????

...Even if foreigners become very reticent to buy bonds due to exchange rate issues, a small increase in the interest rates will attract lots of Americans to the market (and they don't care about the exchange rate, for the most part). That would be true except for two facts:
(1)Joe American is already deep in debt, having trouble paying his mortgage, etc - He does not have any free cash assets to lend to the US government. Bill Gates, all with only even 0.0001% of his cash are already busy getting out of dollars. - I don't even come close to that 0.0001% level but did so 5 years ago (Bought ADRs) and many at my level of wealth are doing so now. Almost every investment counciler has been advising to reduce your holdings in the US and get more into emergent countires etc.
(2)Even the dumbest Americqan investor, with cash he could lend to the US, knows that he could buy a foreign bond (fund at least) and as that foreign currency increases in value wrt the dollar, he could sell it later for a profit. To take an example, if you bought bonds of Brazil only 3 years ago for X dollars, you could sell them today for at least 2X dollars (Possibly 3X dollars if the buy/sell timing was good.) IT IS MUCH TOO SIMPLE a POV to say "EXCHANGE RATES DO NOT MATTER TO AMERICAN INVESTORS" - (except for "financial idiots" who believe this, perhaps)

...Inconsequential given the amount of FDI we receive. Where do you get the idea that foreigners will want to invest in the future US as they have in the past when emergent markets are offering much greater rates of return? Again even US investment councilors are not recomending to Americans that they invest as much as they did relative to the alternatives.

...Moreover, if interest rates go up, so will the savings rate. In normal times, generally true, but if rates are going up to attract reluctant foreigners to buy Treasury paper and many are refusing at any offered rate to roll their bonds and the Mint is reduced to printing new dollars to honor the maturing bonds (causing more inflation, which the FED fights with still higher rates) then that is not "NORMAL TIMES." What typically happens in periods of rapid inflation is that the saving rate goes DOWN as interest rates rise. - People want to buy some thing of value before their pay check loses more purchasing power. For example, in Brazil before the highly successful "plan Real" which killed the run away infaltion, the interest rates got above 25% and yet the people with kind employers were given a few hours off early on payday to go out and spend 100+% of their paycheck (before the merchants could mark every thing up that days 2 or 3 % !) I.e. if the US mint's presses are running to payoff the maturing bonds and FED is raising interest rates to stim the resulting rising inflation, then it is spending, not savings, that increases. (Spend more than 100% of your salary ASAP, if any one is foolish enough to lend you money that will be easy to pay back later. BTW "savings" is just lending money to the bank - few are that foolish in rapid inflation so saving rate goes DOWN, not up)

...it's much better to have them working in offices {instead of factories}. If that work is done in front of a computer - they will either soon have no job or move to India. - get realistic with what is actually happening.

The budget deficit is about $250 Billion this year, which is to say that they're spending about 12% more than they're taking in in taxes. Notice that the budget deficit has been shrinking rapidly over the past few years:

http://www.uuforum.org/deficit.htm

And you're gutting the basic services the legitimate American economy depends on.A 12% cut is gutting? You tell every government contractor that they're getting 12% less now if they do business with the government. Every government employee gets a 12% pay cut. Hell, let's make it 20% and pay off the debt.

No, that is exactly backwards. Almost all modern central banks (even Brazil) now use "inflation targeting" to set interest rates (asuming they have control over them, which is getting to be very questionalble in US with its need to borrow more every year.) I.e. when inflation rate is going up, rates go up to stem the volume of sales on credit. Thus interest rates and inflation both go up (or down) together. Have you not read any of the nearly uiversal cries of Wall Street to the FED almost demanding that the FED cut rates because the GDP / economy is growing "soft"????

Dude, did you even read what I wrote? You're agreeing with me that boosting the interest rates will put downard pressure on inflation, as you repeat throughout your post. Inflation and interest rates are correlated exactly because of this causal relationship. Seems like you wrote this without thinking.


That would be true except for two facts: (1)Joe American is already deep in debt, having trouble paying his mortgage, etc - He does not have any free cash assets to lend to the US government.

He doesn't need free cash. He'll simply sell off some of his other investments and instead invest the money in bonds, as they will offer a superior risk/reward tradeoff. Adjustments of this sort happen every time there is a change in rates or stock performance. And, for the 1000th time, it's not "Joe American" that's in debt and having mortgage trouble. That's the subprime sector, which represents a small portion of the workforce.


Summary not even the dumbest Americqan investor, with cash he could lend to the US, knows that he could buy a foreign bond (fund at least) and as that foreign currency increases in value wrt the dollar, he could sell it later for a profit.

Currency speculation is not the same thing as investment.


Where do you get the idea that foreigners will want to invest in the future US as they have in the past when emergent markets are offering much greater rates of return?

Gee, I guess from the fact that foreigners have been investing heavily in the US for years and years, even while emerging markets offered higher rates of return. The reason, of course, is that those higher rates of return also carry higher levels of risk. You can't find a better risk/return trade-off than America. Notice how quickly investors around the world were to move their money back into American instruments a few weeks ago, when markets were sneezing due to the subprime mortgage fallout.


What typically happens in periods of rapid inflation is that the saving rate goes DOWN as interest rates rise.

Yes, but the effect of the interest rate boosts is still to put upward pressure on the savings rate. That is, in your runaway inflation scenario, people would save even *less* if rates weren't going up.

"The US subsidizes its relatively weak exports heavily." ”
How do you figure? I look at what the US exports. Heavily subsidised stuff, for the most part.
I defy you to prove that this has resulted in a significant loss of jobs, compared to the losses driven by productivity. I defy you to prove that increased productivity has resulted in the loss of more manufacturing jobs, net, than wage-driven offshoring. Let's use the shoe manufacturing business as our model. Or textiles. Or computer parts. Or cars. Tools. Appliances.
Entire manufacturing industries have moved off shore. More are following. Their replacements are mostly high-margin and derivative goods, completely dependent on the off shore manufacturing. ”
So what? So we have lost a lot of manufacturing base. We cannot supply ourselves with the manufactured basics of our economy, or lives. That is different for a big country, like the US, than for a small country, like Finland.
Outside of food, I don't think this is at all true. And logging, mining, real estate, medical and drug, anything defense related (like Boeing), etc.


The US reduces unemployment by lowering wages ”
No, unemployment is mostly lowered by creating new jobs. And new jobs are created by employers who see that they don't have to pay much in wages. Raise US wages and benefits to German standard, and see what the unemployment rate is.
We're hard at work on quantum computing, nanotechnology and space tourism, and you're worried about jobs that belong in 19th century Britain... It makes me nervous when the manufacturing base can't make anything most people want to buy, or need to live.
Ridiculous. America is the innovation capitol of the world. And it always will be? These changes in the US economy are recent. We've already seen some basic industries get passed by in the innovation area - cars, cell phones, generators and the like, tools and machinery, say.
First of all, rising prices and falling real wages are the same thing, so there's no "coupled with" here. Second of all, there has not been a consistent decline in real wages. They've been *stagnant*, not declining. They are not the same thing - the correction for inflation is only part of the decline. Second: real wages have been declining, not stagnant, for the bottom third or more of the economy. Third, prices for stuff people really need have risen with respect to the inflation correction for the wages: housing and transportation and medical care, in particular. Even in the stuff that has not "risen", technically, there has been a hidden inflation in a loss of quality - ever really torque on a Chinese socket? Work in a pair of Malaysian gloves?

So: So the fact that we are seeing higher prices on shit that we do need, coupled with lower real wages, consistently for several years now, means that the question is not answered - right? If you don't like "lower", put "stagnant" real wages (despite the actual reduction in the lower end) (http://www.stateofworkingpa.com/SWP07/SWP07_Figures/table2.html This table shows wages dropping for the bottom 40%, but the 50 decile up six cents http://cep.lse.ac.uk/seminarpapers/18-11-03-STO.pdf This report is more detailed, from '67 to '96. Here we see wages stagnating, with decline or increase dependent on which interval is chosen. Picking convenient ten year intervals from now, we have wages declining from 14.95 in '76 to 13.97 in '96 for the "head of household" working full time. If "head" is the same as "all", we have 14.61 in '06, a net drop from '76. This table http://www.bls.gov/web/ecconstnaics.pdf shows an increase from '01 to '07, but a decrease from '01 to ' 06 - generally, then, stagnant - in "wages and salaries" as compensation cost, recently - a net decline from the 1970s).
The military is only 1/4 of the federal budget. Baloney. You must be failing to include even a share of the debt service, the various hospital and veterans and medical and such, the nuclear budget, and so forth - and including SS, medicare, and various other non-budget programs in the federal budget.
The budget deficit is about $250 Billion this year, which is to say that they're spending about 12% more than they're taking in in taxes. Notice that the budget deficit has been shrinking rapidly over the past few years: Yet the debt has been rising rapidly. How? Because large government borrowings have been moved off "the budget" - such as everything connected with the Iraq war.

The budget deficit also hides deferred maintenance, contracted costs not yet due (such as medical care for Iraq veterans), etc.

He doesn't need free cash. He'll simply sell off some of his other investments and instead invest the money in bonds, as they will offer a superior risk/reward tradeoff. The only investment available for that is his house, for the average Joe. Only a minority of Americans own much stock. And only an even smaller minority is capable of making informed risk/reward decisions regarding stocks and bonds. And, for the 1000th time, it's not "Joe American" that's in debt and having mortgage trouble. That's the subprime sector, which represents a small portion of the workforce. The spectacular news is the subprime sector, but the average Joe is in debt, and a lot of that debt is tapped equity on his house. This tapped house equity has been fueling the US economy for a while now, and that cannot last.

I look at what the US exports. Heavily subsidised stuff, for the most part.

Do you really think that answer will convince anyone of anything other than that you're an obstinate tool?


I defy you to prove that increased productivity has resulted in the loss of more manufacturing jobs, net, than wage-driven offshoring. Let's use the shoe manufacturing business as our model. Or textiles. Or computer parts. Or cars. Tools. Appliances.

I posted a link with a detailed analysis of this question on page 1 of this thread. You can continue to ignore it if you want, but your rhetoric here isn't scoring you any points.


And new jobs are created by employers who see that they don't have to pay much in wages. Raise US wages and benefits to German standard, and see what the unemployment rate is.

Are you saying that you'd rather be unemployed than make 30% more than the average German? Seems like a simple choice to me...


And it always will be? These changes in the US economy are recent. We've already seen some basic industries get passed by in the innovation area - cars, cell phones, generators and the like, tools and machinery, say.

Nonsense. The big leaders in cell phone innovation are all American companies (Qualcomm, Broadcomm, Arraycomm, etc.). Most of the foreign competitors maintain US branches for their high-end R&D, in order to get access to the US workforce. America is the leading exporter of electrical equipment, industrial machinery and advanced electronics. I'd also argue that the troubles that domestic car companies are having have less to do with a lack of innovation than with misreading of the market.


They are not the same thing - the correction for inflation is only part of the decline.

It's true that real wages are determined by the balance between nominal wages and inflation, but that implies that it's categorically incorrect to make statements like "inflation coupled with declining real wages." You can get all huffy and try to look informed, but debate points are not worth anything even if you were scoring them.


Second: real wages have been declining, not stagnant, for the bottom third or more of the economy.

Yes, and they've been increasing, not stagnant, for the top portion of the workforce. What is your point? That if you focus on the worst-off sector of the American population, they face problems? What does that prove, except that America is not a utopia? Moreover, much of the wage pressure on the bottom of the workforce is due to increased *domestic* competition, not jobs disappearing overseas. It's low-skill people immigrating *to* the US that's doing it, not jobs moving away.


Third, prices for stuff people really need have risen with respect to the inflation correction for the wages: housing and transportation and medical care, in particular.

Yes, and total compensation, which includes compensation not reflected in wages, has also risen. In fact, this is where most of the benefits of productivity that would usually have shown up in wages went: to compensating for rising healthcare costs.


Baloney. You must be failing to include even a share of the debt service, the various hospital and veterans and medical and such, the nuclear budget, and so forth - and including SS, medicare, and various other non-budget programs in the federal budget.

What on earth are you talking about? The numbers for 2007 are here:

http://en.wikipedia.org/wiki/United_States_federal_budget,_2007#Total_Spending

Note that Social Security, debt service, veteran's benefits and Medicare are all included. I have no idea why you'd call these "non-budget programs." They are non-discretionary, but they're definitely in the budget. Not sure what you mean by "the nuclear budget" either.


Yet the debt has been rising rapidly. How? Because large government borrowings have been moved off "the budget" - such as everything connected with the Iraq war.

First of all, the public debt has been growing only slightly faster than the GDP, so I wouldn't call it "rising rapidly." See here:

http://en.wikipedia.org/wiki/Image:US_Public_debt_per_GDP_1791-2006.svg

The War on Terror supplementals are included in the link I just gave you. Defense spending still comes out to about %25 of the federal budget.


The budget deficit also hides deferred maintenance, contracted costs not yet due (such as medical care for Iraq veterans), etc.

Yeah, it only counts the money we're actually spending this year. So what? We can have a discussion about projected costs of various programs, but that has nothing to do with the size of the budget today, or the share of it dedicated to defense.


The only investment available for that is his house, for the average Joe. Only a minority of Americans own much stock.

It doesn't really matter what the Average Joe has in the market; the point is that there is enough domestically held stock (and other) assets to provide a big boost to the bond market if rates go up. Whether that comes from the "Average Joe" or from the wealthy elite (or from corporate sources) is immaterial.


And only an even smaller minority is capable of making informed risk/reward decisions regarding stocks and bonds.

Fortunately for us, they have these specialists called "brokers," "financial advisors" and "fund managers" to figure this stuff out for them.

You seem to be conflating the bottom of the American workforce's problems with fatal problems for America as a whole. This is not the case. While inequality is troubling, the US has gone through periods with much greater inequality without imploding. This is great for scoring populist points on CNN, but it's not a terribly accurate way of looking at the position of the economy as a whole. And it's certainly not compelling to people (such as myself) who are not on the bottom.

I look at what the US exports. Heavily subsidised stuff, for the most part. ”
Do you really think that answer will convince anyone of anything other than that you're an obstinate tool? You asked, I answered. Which of the major categories of US export is not heavily subsidised by the US government? - considering that, for example, the US government supports even the civilian aerospace and computer and nuclear stuff on national security grounds, pays for basic medical and drug research, uses military contracting as a sort of floating R&D subsidy of various industries, etc.
Yes, and they've been increasing, not stagnant, for the top portion of the workforce. What is your point? That if you focus on the worst-off sector of the American population, they face problems? What does that prove, except that America is not a utopia? It indicates that America is becoming, is headed for, a kind of non-utopia we thought we had banished from possibility - that we have no magical immunity from the consequences of bad management. Not even jacking around the inflation numbers to hide the sharp boost in the price of necessities can hide that.
Yes, and total compensation, which includes compensation not reflected in wages, has also risen. In fact, this is where most of the benefits of productivity that would usually have shown up in wages went: to compensating for rising healthcare costs. But that also means any measurement of a "rise" in total compensation will mislead if measured in dollars. Employees are receiving less, not more, medical care from their employment. Given even stagnant wages (from dubious inflation calculations) total compensation has fallen. A large increase in real wages would be necessary to cover the loss of health care coverage.


Baloney. You must be failing to include even a share of the debt service, the various hospital and veterans and medical and such, the nuclear budget, and so forth - and including SS, medicare, and various other non-budget programs in the federal budget. ”
What on earth are you talking about? The numbers for 2007 are here:

http://en.wikipedia.org/wiki/United_...Total_Spending
Here's your link info: The President's budget for 2007 totals $2.8 trillion. Percentages in parentheses indicate percentage change compared to 2006. This budget request is broken down by the following expenditures:
$699 billion (+4.0%) - Defense
$586.1 billion (+7.0%) - Social Security
$394.5 billion (+12.4%) - Medicare
$367.0 billion (+2.0%) - Unemployment and welfare
$276.4 billion (+2.9%) - Medicaid and other health related
$243.7 billion (+13.4%) - Interest on debt
$89.9 billion (+1.3%) - Education and training
$76.9 billion (+8.1%) - Transportation
$72.6 billion (+5.8%) - Veterans' benefits
$43.5 billion (+9.2%) - Administration of justice
$33.1 billion (+5.7%) - Natural resources and environment
$32.5 billion (+15.4%) - Foreign affairs
$27.0 billion (+3.7%) - Agriculture
$26.8 billion (+28.7%) - Community and regional development
$25.0 billion (+4.0%) - Science and technology
$20.1 billion (+11.4%) - General government
$1.1 billion (+47.6%) - Energy That must be where you get your 25% delusion. Note my point: You are including such separate items as Social Security in your "federal budget" , and your "defense" budget does not include major military expenditures contained in other parts of the budget - interest on the debt is not even prorated, let alone rationally assigned, for example. The true percentage of the federal budget proper devoted to the military is much, much higher than 25.
Further, with regard to my original point re madanthony's take: U.S. Military Budget - War on Terror Base Spending : The War on Terror (WoT) incurs additional costs by other departments. When added to the DoD base spending, the amount comes to: $474 billion in FY 2006, which is 56% of net discretionary spending, $505 billion in FY 2007, and $554 billion in FY 2008, nearly 60% of discretionary spending. Total base budget for all non DoD/WoT departments is around $370 billion, which stays at the same funding level for all three fiscal years. So no serious reduction in federal expenditures is possible without either serious cuts in the military budget or wholesale discard of ordinary governmental services vital to the economy, even when we accept the bogus assertion that the non-DOD/WOT departments are not spending money on military matters.
You seem to be conflating the bottom of the American workforce's problems with fatal problems for America as a whole. The bottom half to two thirds, yep. This is not the case. While inequality is troubling, the US has gone through periods with much greater inequality without imploding. It's been a long time since we've seen this level of inequality - and those were pretty severely bad times, and our inequality is growing still. Define "implode". There will be no discovery of enormous riches to be had for the pumping, and hopefully no global war opportunity of expanding a colonial expansion, this time around. There is no frontier. And the entire economy has left off producing basic, necessary goods. The bottom half of the US economy is furnishing its life from foreign manufactuires - whose cost is not related to anything of their own, or their influence.
And it's certainly not compelling to people (such as myself) who are not on the bottom. There are of course many people undisturbed by the notion of America failing its promise, and becoming the sort of society we read about in old Egypt or see in Brazil now. These people seem comfortable with the notion that if the rich are doing OK, all the important problems are solved. The only defense the poor have is to make sure that the rich don't do OK unless the poor are taken care of. There are a variety of ways to go about that. Ballot box, jury box, ammo box, use in that order, is the shorthand way of describing the situation.

You asked, I answered.

Your answer was nothing more than a reiteration of your earlier assertion, pumped up with condescension. Why you feel the need to be so argumentative is beyond me...


Which of the major categories of US export is not heavily subsidised by the US government? - considering that, for example, the US government supports even the civilian aerospace and computer and nuclear stuff on national security grounds, pays for basic medical and drug research, uses military contracting as a sort of floating R&D subsidy of various industries, etc.

Well, if you count basic research funding and purchases required to fulfill vital government functions as "subsidies," then yes, these things are subsidized. Of course, by that definition, every country in the world subsidizes these same things, so you're stripping the term of any comparative power. When it is said that "Germany heavily subsidizes its export industries," it is meant that they do things above and beyond the norm types of basic research support and government demand for products that occur in every country. We're talking about a hundred billion dollars per year (or more):

http://www.ft.com/cms/s/0/4255b50a-4b4d-11dc-861a-0000779fd2ac.html

Germany has a slew of industries that would disappear tomorrow without subsidy support.

But that also means any measurement of a "rise" in total compensation will mislead if measured in dollars. Employees are receiving less, not more, medical care from their employment. Given even stagnant wages (from dubious inflation calculations) total compensation has fallen. A large increase in real wages would be necessary to cover the loss of health care coverage.

What you're leaving out is the rise in health-care costs (due to development of new drugs and procedures, particularly ones that keep alive people who would have died). That's where the increase in total compensation is going. Even with reduced coverage, the compensation received has gone up. Also, the health field and associated beaurocracy is one of the main drivers of job growth in the US, so don't start complaining that all the money is just going to doctors. To a large extent, those are the service jobs that have replaced your beloved low-margin manufacturing positions.

Here's your link info: That must be where you get your 25% delusion. Note my point: You are including such separate items as Social Security in your "federal budget" ,

That's because they are part of the "federal budget." Perhaps you could clarify exactly what incorrect definition of "federal budget" you consider to be appropriate?


and your "defense" budget does not include major military expenditures contained in other parts of the budget

Such as? other than veteran's benefits and education for military bases, I'm not seeing much. Note that all of the supplemental spending for wars is included in that figure.


- interest on the debt is not even prorated, let alone rationally assigned, for example.

And by this you mean what? Do you dispute that that is the dollar figure that the federal government spent on debt service last year?


The bottom half to two thirds, yep. It's been a long time since we've seen this level of inequality - and those were pretty severely bad times, and our inequality is growing still. Define "implode". There will be no discovery of enormous riches to be had for the pumping, and hopefully no global war opportunity of expanding a colonial expansion, this time around. There is no frontier. And the entire economy has left off producing basic, necessary goods. The bottom half of the US economy is furnishing its life from foreign manufactuires - whose cost is not related to anything of their own, or their influence.

If this is supposed to alarm me, it's not working. The reason? The countries that are manufacturing the basic, necessary goods you're so fixated on are uniformly worse off than the United States, at every socioeconomic level. You keep touting Germany, but the Average German is substantially worse off than the Average American. I'd suggest you move there if you think it's so great, but of course they don't really accept immigrants there, since unemployment is already so high.


The only defense the poor have is to make sure that the rich don't do OK unless the poor are taken care of. There are a variety of ways to go about that. Ballot box, jury box, ammo box, use in that order, is the shorthand way of describing the situation.

Yeah, okay Robin Hood. You have fun with your crusade on behalf of the huddled masses. Also, try to ignore the fact that poor people from all over the world are literally dying to come and work here, as there is no country in history that has offered to much opportunity for prosperity and advancement.

When it is said that "Germany heavily subsidizes its export industries," it is meant that they do things above and beyond the norm types of basic research support and government demand for products that occur in every country. We're talking about a hundred billion dollars per year (or more): And how much are we talking about in the US? This cost plus defense contracting and R&D stuff is not peanuts. Germany has a slew of industries that would disappear tomorrow without subsidy support. As does the US. Especially the export ones, but including things lke ethanol.
That's because they are part of the "federal budget." Perhaps you could clarify exactly what incorrect definition of "federal budget" you consider to be appropriate? The record of the getting and spending of federal tax dollars according to the House Budget Committee edicts - the source and sink of the government's income. The part of the government that goes into debt, and has to borrow from sources like the Chinese governemnt and the Social Security Trust fund to cover its deficits.
Such as? other than veteran's benefits and education for military bases, I'm not seeing much. Note that all of the supplemental spending for wars is included in that figure. . I mentioned twice now at least a pro-rated share of the debt service - reading comprehension? Additionally, we know that energy, science, foreign affairs, agriculture, transportation, community and regional development, medicaid and other health related, and general government also contain military expenditures.

An honest accounting would take into consideration that most or all of the debt service is for debt accumulated in military expenditures. That with a guesswork stab at the others puts the military share of the budget well over a trillion. Subtracting SS and Medicare (the separate lines on the pay stub, revealing their off-budget status) puts the budget under 2 trillion, and that raises the military fraction to over 50% with room to spare.

A more sophisticated analysis can raise it to probably over 80%, with reasonable guesswork. But that is difficult to document - the US federal accounting procedures and official economic info sources do not make this easy.
Yeah, it only counts the money we're actually spending this year. So what? So it's dishonest. Any business that did that, and suddenly failed due to incoming expenses left off the books, would be sued. It's management might be jailed.
Also, try to ignore the fact that poor people from all over the world are literally dying to come and work here, People are literally dying to get into Spain, as well. And Canada. Brazil. Ethiopia. Also, Jordan and Syria. And, yes, that Germany you disparage. as there is no country in history that has offered to much opportunity for prosperity and advancement. For which you give credit to the current policies and circumstances. Others, looking at the consequences of the recent changes in the US economy, think the currrent policies could bring that long history to an untimely end - and, unlike you, they care about that.

And how much are we talking about in the US? This cost plus defense contracting and R&D stuff is not peanuts.

Not sure what it would come out to, but Germany's program works out to about 4% of Germany's GDP. If America had subsidies that large, they'd amount to over $500 Billion per year (about as much as Social Security). I have a hard time believing that the actual subsidies are anywher near that large. Note that I do not count defense contracts or R&D as subsidies, but if you do, they should be pro-rated to take into account the fact that America is providing Germany with their security. I.e., a certain amount of the military expenditure goes to maintaining bases and troops in Germany, which then require the hiring of German support staff, etc. So some portion of that should be accounted as subsidies to *foreign countries*.


As does the US. Especially the export ones, but including things lke ethanol.

The ethanol industry is not typical of American production as a whole. It's a fledgling industry that explicitly receives subsidies to protect it while it rises to maturity. Outside of a few niche sectors of the food industry (su