Most modern technological products were invented in America. Originally manufactured in U.S.A., now they are mostly manufactured overseas and imported, because of company greed for higher profits. Laptop computers, flat screens, television sets are typical examples.
This is the major reason for our huge foreign trade deficit and underemployed middle class.
Thanks to ABC Evening News for their week long series on the subject (28 January to 4 February) and again in a series of Evening News in September 2011. Thanks also to General Electric for combatting this trend with their decision to expand their major appliance division in Louisville.
It is understandable that, in order to keep product prices affordable, some lower value commodities with high labor content should be made in developing countries with lower wages - for example circuit boards or lower priced clothing. It is in American interest to utilize the low labor markets of neighboring countries for this purpose, thus increasing their standard of living and creating markets for American products. Unfortunately, in recent years increasingly already existing factories in Central America have been closed and their production shifted to China.
By contrast, Germany has a very successful export industry in spite of high labor costs and utilizes neighboring east European countries for high labor content production, not overseas countries.
The average American consumer is partly at fault for the sky-rocketing trade deficit. Does he or she care where something is made? No, the lowest price is the major factor in every purchasing decision. No American companies are blameless. One of the largest, Walmart has forced many of its American suppliers into bankruptcy, then arranged for all the machinery, tools and designs to be exported to China. The products are then imported, still bearing their original American trademark. Today Walmart imports as much from China as all western Europe!. It's amazing that Pres. George Bush actually praised Walmart in one of his State of the Union speeches and held it up as an example of a well run American company!
The new Republican congressional majority, in its zeal to reduce the federal deficit, is determined to cut all government subsidies - for education, for research, for development of new energy resources and infrastructure. They forget that the huge expansion of the U.S. economy in the Fifties and Sixties, and the growth of a prosperous middle class, was largely due to government subsidies, such as the G.I. Bill (providing college education and low cost housing for army veterans), the space program, the development of the Internet, the building of the Interstate highway network. The South-West, home to the most vociferous government haters, would still be sparsely inhabited desert without government dams and canals.
Yes, reduction of the government deficit is essential. But even more important is development of resources that will provide future growth and tax receipts. The government's 2012 budget proposal cuts back on many spending items, some of them quite painful. It eliminates many wasteful military programs that are no longer needed, ironically the Republicans are opposed to these military savings! But it continues incentives for small business to increase hiring and capital expansion, for research on new energy resources, renewal of our rapidly aging infrastructure. These are all essential for continuing growth of our economy. Predictably most Republicans are opposed to these incentives.
In the coming debates it is essential to consider the many items proposed by the Bipartisan National Commission on Fiscal Responsibility and Reform and select at least some of them, particularly proposals for simplification of the tax code and elimination of the myriads of tax loopholes. For some reason none of the members of Congress, of either party, wanted to consider these serious proposals for deficit reduction.
Why don't you write to your Congressman and Senator and ask why they aren't debating these proposals.
Help the economy and Buy American whenever you can, even if it costs you a little more!
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