By Ilya Galak (R)
“Not only the wealth, but the independence and security of a country, appear to be materially connected with the prosperity of manufacturers. Every nation, with a view to those great objects, ought to endeavor to possess within itself all the essentials of national supply. These comprise the means of subsistence, habitation, clothing, and defense” – Alexander Hamilton
“Crony Capitalism is an outsourcing of American jobs plus walmartization of the whole country” – I.G.
What is the trade deficit? Technically it’s the amount being imported surpassing the amount being exported. Another word for this is OUTSOURCING; since that is exactly what it is, buying products from overseas instead of making them here.
As shown in the above charts, there is a strong correlation between the amount of outsourcing and our national debt. How can this be? Well, let’s see how manufacturing has an effect on our economy.
Say for example that I own a clothing factory.
To own a factory I’d need to own or rent the property, and pay property taxes in turn.
Next I’d need to hire workers to work the machines and sow the dresses, T-shirts, and other things I manufacture; they will end up paying income taxes.
But it doesn’t stop there: They will need to live somewhere; therefore landlords will get business and pay taxes on houses and apartments. Then they will hire management staff to maintain the property, thereby creating more jobs and tax revenue.
Many, many small businesses make a living by serving working people.
All those factory workers will have to buy their food, household supplies, medicine, and other essentials somewhere. But it’s not only base goods, when people have money leftover after all their needs are covered they spend a lot of it on luxuries and entertainment.
That leads to even more businesses thriving. All these businesses that serve working people will hire even more people and create even more jobs, strengthening the economy even further.
Now lets see how outsourcing factors into this cycle.
I decide to close down my factory and start manufacturing my products overseas (China, Honduras, Pakistan, Canada, doesn’t matter).
I fire all my workers and they end up going on unemployment and welfare. Now, instead of paying taxes they are living off of the government.
They will end up not being able to afford market rents and move out, possibly into government housing. The landlords will have to lay off their staff and pay fewer taxes.
The laid off workers will not be able to afford many goods, especially not luxury goods. Most if not all the small businesses that relied on their patronage will end up closing and laying off their workers, creating more government dependents.
To curb the unemployment spike that outsourcing has created the government is hard at working printing money and establishing many useless government and “non-for-profit” agencies to create jobs.
But all that does is make our debt grow and make more people dependent on the government.
This is a trend all too familiar in this country. Do you know of any cities or towns that have lost themselves in this way?
This is why our national debt is as big as it is and is still growing. It’s not just a matter of wasteful spending; it’s that the roots of our economy and being pulled out and the tree is drying up.
Please, if you care about the countries’ debt and future: you have to work towards bringing manufacturing back to the USA. It is the only way to fix our economy and to generate the wealth needed for a balanced budget.