To expect that the imbalance in manufacturing will change would be to expect that the deal we have wiht Chine (you produce and we’ll be your consumer) would have to be dramatically altered. How likely is that when China holds such a huge part of our national debt?

We may need some more protectionist trade policies to make it happen to the level that I want, but I strongly suspect that good business judgment will return many of these jobs to the US is due time. Sooner or later, the companies that use offshore labor will get tired of being screwed by their foreign counterparts. It is impossible to redress any wrongs committed against you by these people, especially the Chinese. Most companies will not even try to sue because there is no way to enforce the judgment. When you look at some of the stories of businesses getting screwed by chinese corporations (which are really just extensions of the government) you cant help but wonder what it will take to cause a sufficient loss of confidence to return the jobs to the US.

Furthermore, there has to be a tipping point where consumers demand made in the USA. From poison dog food to lead tainted childrens toys to Chinese drywall, sooner or later the desire for cheap will be trumped by the desire to not purchase dangerous shoddy products.

I am strangely optomistic.

There was once a fellow who jumped off the Empire State Building. As he passed the 10th flood someone yelled out “How is it going?”. His reply was “So far, so good”.

Since 1981 the Republicans have been reducing taxes, increasing spending, and running up huge debts and the world has not ended. Former Treasury Secretary Paul O’Neil said that when he tried to resist tax cuts, Vice President Cheney told him: “Reagan proved that deficits don’t matter.” During the 2004 presidential campaign, a senior administration official put their worldview more bluntly: “Name me one person who has lost an election because of the deficit.”

“So far, so good”.

No matter how many cuts we make in “entitlement programs” they will not work unless we stop viewing hedge funds and other market manipulators as a good for liquidity and therefore society. We must stop churning out graduates with majors in financial engineering.

And once we return value added jobs to the country, we must prevent the corporations that house those jobs from paying their taxes in other countries while hiding their liabilities in others. Free trade has its positive aspects, but when it is allowed to run amok, it becomes a race to the bottom.

When you look at the statistics on the amount of money that people have saved for retirement, I don’t know how many entitlement programs we can really cut or reduce. But we can deal with the fundamentals of the economy.

and as Paul Krugman pointed out, our Federal Government is basically an insurance company with an army, so we need to drill down on the “entitlement side”

o need to say how much money
a Colonel who had fifteen years of active duty when he lost his hand to
a road side bomb in Afghanistan, how much money should a eighty-year old
man earn from Social Security after working 160 quarters and whose total
input was $100,000. And who do these interact and what is the optimal
way to have people weigh their desire for public programs and their desire
to keep the tax burden down, an issue raised at least half a century ago.

Dr. Newman should be congratulated for his
National Budget Simulation, but it does not
get down to the level of detail we need.
(He himself refers to it as simple.)www.nathannewman.org/nbs/
Here are some good blog posts and articles on
the issue of tax burden.

We have had many good analyses of how the income tax burden is distributed
and whether the wealth or the workers are paying enough, and that half
of Americans are not paying any income tax but may be paying
Social Security tax as well as state and local taxes.

1.

http://www.npr.org/blogs/money/2010/04/inside_the_returns_of_americas.html
2.

http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0
3.

And a Dangerous Economist Posting on April Ninth 2010, “Does Everyone Pay
Taxes?”
4.

http://www.npr.org/templates/story/story.php?storyId=125991138

Dr. James Buchanan talked about the tendency
towards deficits when benefits are specific
and taxes are general James P. Buchanan, Public Finance in Democratic Processes:
Fiscal Institutions and Individual Choice, way
back in 1967.

1) The Republican Party *says* it is against government interfering in society (like mine safety for example). Big deficits achieve this goal.

2) The Republican party *actually has* run-up huge debts and deficit.

In other words, they do what they say and say what they do. I am not putting words in their mouth or actions to their hands, both are theirs, not mine. If you think otherwise, you have to conclude that they are simply stupid and naive.

I might disagree with the Republican Party but I know that they are not stupid. They can do the same math that you or I can, maybe even better. The Republican Party is a trained and disciplined organization that knows what it wants and how to get it. Our huge debt is a deliberate and calculated part of their efforts.

You can love them or hate them but do not underestimate them.