Rick Lowe
On July 29, 2011, Northwood University released a 29 page publication asking the question above.
Here's the Executive Summary:
"This paper is a critical analysis of U.S. monetary, fiscal and regulatory policy from the early 1900’s to date. In section one: “Introduction, the Market Process and Government Intervention” the authors examine the economic, political and philosophical underpinnings of American greatness and introduce their concerns with improper government fiscal, regulatory and monetary policy.
"The second section of this paper examines the growth of government at the local, state and federal level from 1900 to 2010. The data shows a clear change in the size, scope, role and focus of government at all levels. As measured by GDP, combined local and state government in 1902 was more than twice the size of the federal government, a clear validation of the “Principle of Federalism” more than 125 years after the signing of the Declaration of Independence. It is also important to note that government consumes roughly six times the amount of U.S. GDP in 2010 than it did in 1902.
"The United States is the largest and most successful economy in human history, yet if we are to avoid the decline of capitalism predicted by famed economist Joseph A. Schumpeter, we must reverse the trends outlined with empirical data in section three. Finally, suggestions for the reform and advancement of the U.S. economy are outlined in the paper’s conclusion."
Lets not forget that 90 percent of GNP in the United States is produced by the Services sector .. Real manufacturing of goods has been in decline since the 1970’s.. A nation that produces fewer and fewer real goods is a nation in decline as real wealth declines.. Even President Obama has recently had to admit this fact as the US economy struggles with high unemployment and appears to be falling back into recession.. Lets not forget that this will have a negative impact on our Bahamian economy and more specifically tourism..
Missed you Tradewinds.
There are so many ways to look at Manufacturing, but Carpe Diem does about the best job with charts that I’ve seen.
See this post: http://bit.ly/e6aKMv
Is it really in decline???
Rick.. There are many ways to to view this economic issue.. Carpe Diem looks at United States manufacturing in terms of manufacturing output in 2005 dollars for the period 1970 through 2009.. No one argues about US real dollar output except that China is rapidly over taking the seven other countries shown on the chart.. My concern is with the GNP Mix.. Using the chart’s historical time frame, US manufacturing output in the late 1960’s use to be about 70 percent of GNP with the service sector making up about 30 percent.. The real issue today is that manufacturing now accounts for about 10 percent of the mix with services accounting for around 90 percent.. Perhaps the real reason for US output still leading the world is that US output is made up of expensive hi-tech and defense manufacturing output which keeps the US on the top of the chart.. But lets not forget that China is aggressive expanding manufacturing in these two key sectors..I wonder how the Professor Perry’s chart will look like in ten years from now?? Time will tell..
It’s also interesting to note that manufacturing as a percentage of GDP is declining the world over as services play a bigger role.
See more from Professor Perry here: http://bit.ly/lzf2B8
Could not agree with you more Rick as this reinforces my position about the GNP Sector Mix.. However, China is proving to be the exception to the rule as over the past 20 years China has built up a large, diversified industrial (manufacturing) base extending from consumer goods, capital goods to advanced military weaponry.. Today, right or wrong China has become an economic power house through the expansion of its manufacturing base. The rapid growth in China’s manufacturing base is clearly shown in Carpe Diem’s first chart above..
Let us not forget that this is the same country that annually game plans and simulates a nuclear confrontation with the United States.. This is rather frightening given America’s manufacturing base..
I’m sure the US Military Complex is aware of all this and it’s another good reason to get out of all the foreign forays and concentrate on a defensive policy?
I’m confident the US is doing their own nuclear confrontation simulations v/s China.
One more final word.. The American dream used to be a potential reality.. Today that dream is only a myth and a vanished hope.. The greatest nation know to the world is crashing as the economy is heading into ruin.. When the US dollar finally looses its status as the world’s Reserve Currency, the 65 year old “free ride” for America will be over.. Inflation will jump by 10 percent and the Federal Reserve will NOT be able to simply print money to cover its massive debt service owed to both its citizens and foreigners alike.. The America as we know it will no longer exist.. This is happening NOW and is not just a wild, out of the ball park prediction..
The implication for our Bahamas are equally frightening.. What would our tourist sector be like without American tourists?? Does anyone remember the “the Voluntary Restraints” on international travel imposed by the Nixon Administration?? I think not.. Yes we do lose visitors.. Remember when we had over 8,000 Japanese visitors coming annually to the Bahamas!! That was just 10 years ago.. Where have they all gone?? What about the Central Bank of the Bahamas with all its reserve held in US dollars which has lost over 20 percent of its value over the last decade.. Is the a prudent policy for the Central Bank to maintain such a policy?? I think not..
These are times when all segments of Bahamian society must begin to develop contingent plans which take into effect economic variables which we never thought would ever happen in our life times.. The Bahamian government should identify and encourage the best minds in the country with real meaningful international experience and understanding to come forth with new approaches and ideas which might buffer our fragile economy from the economic storm of financial globalization.. I realize that this will not happen until it may be to late, but the idea should at least be put on the table.. These are potentially dangerous times and we must be prepared to confront these changes with constructive responses..
As for me, I am not and do not want to be a citizen of the new world order, but I am a citizen of the Bahamas and I want our country to survive and prosper as a free and independent sovereign nation.. May God’s grace bless our beloved Bahamas..