What are your thoughts on our economic future?

Question

I'm wondering how the following things add up to affect the U.S. economy:

1. We've become a nation of consumers instead of producers.

2. There's more debt now than ever before.

3. We've become almost totally dependant on transportation.

Any thoughts?

Answer 1

US has become a nation of consumers instead of producers; that is fine. US is still the current leader in technology, and it really does not need to be a factory eternally. The companies can come up with the breakthrough designs, and manufacture them offshore. Remember it is a global economy these days. What does that means? Remember the phrase "divison of labor"? When making a product, it moves along different departments and they each add something on untill the entire product is assembled completely. Look at the car manufacturing, one department is putting on the new wheels, and another is doing the painting. If you ask the paint department to put on the wheels, they may take longer time. Vice versa, if the wheel department is to do the painting, it may not be a good paint job. Each department is specialized in something, they are the most efficient among the departments, and best to do that job. In a global economy, each country is good at doing something too: China has cheap labor, and they have excellant factories; US has good technology, and engineers and scientists can come up with breakthrough technology; India has good programmers, and they provide very good IT services, etc. So, if we zoom out to the global level, the world is more efficient when each country do what they are best at. It is competition of no competition...who can beat the best, unless you become the best.

The debt is more than ever. True, and it is a very bad thing. US need to stop the wars, and also stop getting into any new one. The war is not economically productive. The people pay for the wars, and there is no economical return...unlike investment. Also, US technology is geared toward the defence these days and not much in the commerical sectors. Remember in the old days, US is known for the invention of telephone, car, airplane, etc. Look now, what is US famous for...making war? US invented the semiconductor transistor in the Bell lab, and now South Korean is the best at it. American invented the car, and the Japanese is best at it now. Things need to change, otherwise the US economy will face a fatal "landslide" (just like the Dixie Chicks song...they are true with what they said).

US have become almost totally dependant on transportation. I think this is okay because it is a common problem for every country. If the rest of the world do not have this problem and US is the only country with this problem, then it is a big problem; US becomes a handicap. However, if US can develop new technology to be energy efficient ahead of others, then US is on the upper hand. Currently, Japan is the leader in the hybrid car...and US is far behind in it. Thus, all US car makers are suffering.

Remember Newton's third law, action and reaction. Nothing happen without a cause. US is in the current state because of the decision of the current administration.

Answer 2

1. False. If we didn't produce anything, we wouldn't have the means to buy the things we consume. While yes, manufacturing in America has taken a dive in the past couple decades, we do produce a great deal that gets sold both domestically and to international markets. In place of manufactured goods, America is a leading producer of intangibles, such as computer software, ideas, entertainment, expertise and services.

2. Yes, the debt America holds is pretty huge. And it needs to be reduced. However, it cannot be reduced by increased taxation, as increased taxation will harm the economy and ultimately decrease tax revenues. What must be done is twofold: First, REDUCE GOVERNMENT SPENDING. Second, reduce barriers to production and profit--in other words, decreased regulation of business and industry, as well as even lower taxation.

3. So what? Contrary to the popular belief of some, there is plenty of oil to last well beyond our lifetimes. This is, relative, to the second point, a non-issue.

Answer 3

I won't scare you with my thoughts. But the outlook is not good.