Less than 10% of our economy is related to the production of basic goods and services.

[dixiegrrrrl]

That is horrifying....

"70% of the US economy is consumer spending, with at least 20% of it directly tied to commercial retail real estate. Less than 10% of our economy is related to the production of basic goods and services. This style of economy cannot handle a pull back in consumer spending. "

'Course now, that 70% is being curtailed, including the 20% tied to now failing commercial real estate.

So we are not buying much, jobs are very hard to find, esp. well paid jobs, and we are producing what?

[OHdem10]

1. G. Immeldt has said more than once, we must get our MFG base

back up to 15% to 20% in order to sustain this economy.

Immeldt, Head of GE, explained this in the context of explaining
that mistake had been made in decidion to make ours a Service
Economy. He is making a conscious effort to keep some mfg
in US.

[AdHocSolver]

6. To make the US economy work, 80 percent of what we BUY must be made in the USA.

Immelt's proposal is pure self-serving supply-side economics.

An economy is composed of a group of regional markets. Economic activity is based on a flow of goods and services within those markets using money as a medium of exchange.

When there is massive offshoring of jobs so that 80 cents or more of every dollar goes to China (the rest going to corporate profits) the medium of exchange exits the country, and Americans have to borrow money to buy more goods. If the money spent went to pay other Americans who made those goods, those other Americans would have money to spend on your production. Then you wouldn't have to borrow money (at usurious interest rates) to make your purchases. Anyone with credit card balances is living off of borrowed money that increases the costs of anything you buy.

That wide-screen TV you bought costs a lot more than the department store price you paid if you are paying interest on your credit card for the "loan".

All the stimulus money in the world will not save the U.S. economy if it all goes to China to buy imported goods. Retraining Americans in "green" technology is a fools solution if the corporations are allowed to ship those jobs to China, as they shipped computer technology and every other technology offshore.

We need to bring jobs back to the U.S. What kind of jobs? A poster in another thread said it best:

"Where we need jobs is in the stuff that everyone HAS to purchase. The everyday needs that we as a nation were able to produce before the outsourcing boom. Things like the shoes on our feet, and the shirts on our backs. Things like toasters and light bulbs. Things like computers and cars. And when I say produce, that means all components."

This is the ONLY way to save the U.S. economy from collapse. This is the only way to reduce the U.S. debt. We need to return, not 15 percent or 20 percent of the jobs, but 80 percent of the jobs to America.

[Ghost Dog]

10. The EU would of course have to do much the same;

the EU is the largest trader with China. I would foresee an EU-Russia-Japan trading axis and an Asian single market as then essentially looking after themselves as North America looks into itself.

[eilen]

11. Is the current economy worth saving?

How do citizens change the economy? It seems most of this is government policy driven. We've just been shown who is driving government policies -- those that have bought and paid for it--big business. Our people need to wake up and look past this week's sales circulars and figure out how we will survive this, how do we plan for the future. I don't know where to steer my son when it comes to college and a career. It is clear to me that the only way we can make any changes for ourselves is to create our own microeconomies, keep our skills alive. Otherwise our people will be worthless helpless paper and button pushers and will literally be beholden to x or y company for water, food and power. We are creating a idiocracy of basic living skills. I see no point in supporting the import and service economy. Our tree's base is looking very lean, bare this year. I've sent grocery and bookstore gift cards to my family for gifts. My husband is an electrician who has been out of work since September. He has been taking training classes in the evenings and the last class he has completed--photovoltaics-- was a joke. He sees one factory in this country that is actually producing the panels on any kind of scale, the rest are in China. He sees the writing on the wall.

[AdHocSolver]

17. Creating our own microeconomies, as you put it, IS a viable solution to our economic problems.

The difficult part in making such a solution work is to get enough people involved in such a microeconomy, or "local" economy, to make it work.

The point of such a solution is to get people to be independent of, and not take part in, the so-called "global" economy run by the monopolistic, multinational corporations.

The power that companies like Wal-Mart have is due to the fact that so many people abandoned local businesses to save a few dollars, which made Wal-Mart super wealthy, and drove smaller companies out of business. Wal-Mart grew because the American public fed it to obesity.

China became our major source of goods because Americans paid lip service to the "Buy American" slogans as they eagerly saved a dollar or two by passing up an American-made item for some Chinese piece of junk.

The only way the people will get jobs back is to stop buying imported junk, and seek out locally made goods, even if it means spending an extra dollar or two. Every time you spend money on an imported good you give sustenance to the corporate monopolies, and take income away from an American. At the same time you spend money on an imported item, you increase the trade deficit, put the country further in debt, and increase government deficits since Chinese workers don't pay U.S. taxes, and neither do corporations who import foreign-made goods.

If you can't find an american-made source for some item, don't buy anything until you do find such a source. Americans are the most weak-willed, childish consumers, who are unable to forego a supposed bargain to save a dollar. It takes only a second or two to check country of origin. Is that American flag you are about to purchase really American-made or does it have a tag saying "Made in China" on it?

(Note to ellen: the "you" in my reply is a generic "you" that refers to any American.)

Telling Americans to retrain for a "green" technology is a sham if the corporations are allowed to offshore those jobs. The computer industry was developed primarily in the U.S. and now practically all of the hardware, and even much of the software, is imported. Currently, there is nothing being done to prevent the multinational corporations from shipping those jobs offshore as well.

I don't like to write posts of doom and gloom, but we see enough posts of the Pollyanna variety, which requires a dose of reality.

Is our economy worth saving? It is the only economy we have. The alternative to a working economy is a depression.

The multinational corporations have defined the issues in such a way as to confuse the American public.

A few nonsensical economic terms that are corporate obfuscation: "global economy", "free markets", "free trade", "competition" (this term used to mean something).

[wuvuj]

18. Well if it has the word FREE in it...well there you go?

"A few nonsensical economic terms that are corporate obfuscation: "global economy", "free markets", "free trade", "competition" (this term used to mean something)."


Maybe when you hear or see the word FREE...it really means a freebee for our corporate masters?

[postulater]

2. We're screwn.

But rather than just make stuff, we could revive the repair industry.

Plastic crap has a way of breaking and becoming useless. It would be good to see either more durable stuff produced or at least things that can be repaired.

Nowdays, when something breaks it's often cheaper to buy a new one than to fix it.

We have a GE refrigerator in our kitchen that is 53 years old. Not very efficient but still keeps our food cold. It hangs horizontally above the counters and is irreplacable. Back then they made them to last.

[izquierdista]

4. Especially plastic crap from China

Why there's a whole industry there waiting to be set up. Unpack cheap Chinese shit and fix it so it won't fall apart on the arduous truck ride to the dollar store.

[JDPriestly]

8. My Maytag washer is over 25 years old.

I've had it 25 years, and I bought it used.

[postulater]

13. And the old ones are much more repairable than the new.

Sometimes parts get hard to find for older things though.

[eridani]

3. You have a quote. Link? n/t

[dixiegrrrrl]

5. Here...one link of many many.

This is from a page on status of food shortages.
The quote is found about 2/3 of way down page on the Economy section.

http://www.silverbearcafe.com/private/12.09/cropcrisis.html

"US Economic Disintegration

70% of the US economy is consumer spending, with at least 20% of it directly tied to commercial retail real estate. Less than 10% of our economy is related to the production of basic goods and services. This style of economy cannot handle a pull back in consumer spending.

America is facing a terrifying future. As the dollar loses most of its value, America’s savings will be wiped out. The US service economy will disintegrate as consumer spending in real terms (ie: gold or other stable currencies) drops like a rock, bringing unemployment to levels exceeding the great depression. Public health services/programs will be cut back, as individuals will have no savings/credit/income to pay for medical care.

What has already happened in the last year offers a good preview of what to expect in the next:

'Tent Cities' are growing all around the country.

California is experiencing a meltdown.

Police cars are being repossessed due to falling tax revenues.

Major retailers, hotel chains, and theme parks are going bankrupt.

Loan quality at American banks is the worst in at least a quarter century and is deteriorating at the fastest pace ever.

The victims of this financial disaster don’t have the money to bury their loved ones.

US states have started printing their own currencies.

Recession has put a major strain on social security trust fund.

US Contract law torn apart."

[Hannah Bell]

12. if it's one of many, how bout one that isn't a silver-bug site.

[JDPriestly]

7. This is the most important thread that I have seen on DU ever.

You really highlight the crux of matter with regard to our economic mess.

[dixiegrrrrl]

15. That 10% says it all, doesn't it?

I do indeed find it extremely disquieting.

[unc70]

9. All economies are headed in that direction. Automation, etc.

Anything approaching 100% is usually called "subsistence".

"Productivity" is output per employee, a measure of the level of automation in use.

"Efficient" markets eliminate "excess profits" due to locality, secret process, protectionism, and anything else, ultimately approaching a model with high fixed cost in equipment (for traditional products, but not IP) as a barrier to market entry by new producers, large run rates (number made), tiny gross profit per item produced, able to produce additional quantities at little incremental cost, but at high risk of economic failure if unexpected rapid decline in product demand. (For example, auto parts suppliers over past year, with danger that last few remaining "efficient" suppliers would all fail before anyone could respond.)

Increasing automation and robotics are rapidly grinding away at everything we think we know about how the world works.

Let me add that this is not just about the US. This is a problem for the entire world economy, but also a great opportunity.

[4dsc]

14. Its called consumerism aka conservative economic policy

I seem to remember that back in the 80's the rage in the economic world was that the US would transform into a service economy for the rest of the world.. All we had to do was sit back in our easy chairs while the rest of the world made goods for us at very cheap prices..

[Bewits]

16. Question??????

Here is a question, what the hell benefit does this country receive by sending huge amounts of jobs overseas? I am smart enough to know that a few get very rich though this process of outsourcing jobs, but what about everyone else? I happen to live in the once great city of Cleveland, Ohio and let me tell you that it’s not looking good around here. Most of the residential areas of the city are in shambles, the economy is really non-existent, the roads look like they have been bombed, and the schools are a complete failure. Is this what the world of outsourced jobs and the global economy looks like? Again, what benefit does anyone, besides the rich, receive in this country from the outsourcing of jobs and massive amounts of Chinese imports.

[Statistical]

19. US industrial output is 2.7 trillion and is more than China AND Japan combined.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition

Service sector makes up the lions share of US economy but it isn't 1900 anymore, the service sector makes up 64% of the WORLDS economy.

US is the third largest exporter in the world at 1.2 trillion.
http://en.wikipedia.org/wiki/List_of_countries_by_exports

The idea that because $9.99 toys at Walmart aren't made in the US that the US doesn't make ANYTHING is sad and tired meme.

[Hello_Kitty]

21. We don't make the stuff most of us use

I don't know about you, but I'm not in the market for an airplane or armored tank.

[Po_d Mainiac]

20. This is so sad it's almost comical

U.S. Container Exports Still Dominated By Junk -- Scrap Paper, Scrap Metal And Bulk Commodities

http://www.manufacturingnews.com/news/08/0731/PIERS.html

The United States continued its years' long trend of exporting scrap paper and commodities, while importing orders of magnitude greater amounts of high value-added manufactured goods. In 2007, U.S. retail giants, Wal-Mart, Target, Home Depot and Sears were the four largest importers of ocean freight containers

snip

America's largest exporter, in terms of volume via container, remained a company virtually unknown in the United States: American Chung Nam Inc. The Chinese company exported 211,300 containers of waste paper to its Chinese sister company, Nine Dragons Paper Industries. Its exports were one-quarter the amount of Wal-Mart's imports. American Chung Nam's cargo was worth virtually nothing in the United States.