Lots of attention is being paid to the notion that manufacturing is declining in this country.
We see numbers in newspapers and national publications that manufacturing jobs are down to 12 percent of the total jobs in the labor force. Just a decade ago those numbers made up 25 percent of jobs. The president and Congress say they want to help manufacturing.
The problem is that we manufacture more today, with half the people, than we did just a decade ago. It's really simple: We have had our productivity increase through technology and automation to such an extent that we can produce more with fewer people. Locally, just take a look at the number of employees at our cement plant today as opposed to 1950.
Far from importing everything from China, we produce in America in dollars spent by Americans 88.5 percent of everything we buy. If we were to get up in arms about imported manufactured goods from foreign nations, we should be more angry with Canada and Mexico who are our largest trading partners.
Not only is our manufacturing becoming increasingly more productive, we are producing a greater volume of output. All of the knick-knacks at Walmart sold in a year amount to $260 billion in a $14,500 billion national economy.
Likewise, we shouldn't sweat the Middle Eastern oil too much. We have more than enough oil in the U.S. to supply all of our needs. With the increase in provable reserves made possible by fracking technology, we have hundreds of years of oil right here at home.
We only use imported oil because our government won't let us exploit our own resources. We don't have to import oil.
Should we rely on domestic oil production, our outlay of money for imports would dwindle and we no longer would have to worry about China holding our debt. The United Kingdom and Japan hold more of our debt between them than does China anyway. So who holds the most of our debt?
Well, interestingly, the U.S. government holds the most U.S. debt because of the increase in the nation's money supply over the years. If you print money to create more cash in the economy, normally the Federal Reserve Board and the U.S. Treasury buy up a large percentage of the issued notes and bonds.
It's sort of a circle which artificially increases the monetary reserves of the government.
Really, its sort of disappointing that we really don't have China to kick around for the debt problem and that we worry so much about the Middle East oil when we could just as easily be producing our own.
Many thanks to The Motley Fool newsletter for many of the concepts contained herein.
Stephen Fletcher was graduated decades ago from Cornell University with an A.B. in Economics and from Michigan State University with an M.B.A. He has lived and worked in the decades from graduation until now in the Alpena area. He thinks economics is fun and interesting.