Problems with the US economy:
1. We must stop the systematic de-industrialization of the US. Virtually every industry in America is under assault from foreign competition. Sending our industrial, manufacturing and high tech jobs overseas is economic suicide in the long run. While it is nice to get these products at a lower price than what we could make them for here, in the long run, it is economic death for the US. Competition is good up to a point. The bad is trying to compete with a company that makes their products outside the US and pays those employees the equivalent of 50 cents an hour. There is no way a US company can successfully compete against a foreign made product with such low labor costs. What happens is that companies often try to cut their labor costs by getting rid of older, higher salaried employees, cutting benefits and wages or replacing American workers with illegal aliens. Free trade has to be FAIR or it harms the US economy in the long run. The need to keep costs down (and wages down) for American made products is another reason why wages are not keeping up.
2. The US has been sending an increasing amount of our national wealth out of the country for decades due to our huge balance of trade deficit. Presently, the US sends about $600 billion a year to oil exporting countries, mostly the Middle East. Immigrants, legal and illegal, send billions of dollars annually to their native country - mostly Mexico. Consumers send billions of dollars a year to China and other countries for consumer goods. The economic stimulus money Americans received during 2008 did more to stimulate China and other foreign economies than the US economy. We are making the rest of the world rich while impoverishing ourselves. This money should be creating jobs and economic activity in America,
3. Personal incomes are not growing in real terms. Most people make more money by working more hours. Wages have not kept up with all the increases in normal living expenses. These increases are in the cost of housing (both ownership or renting), insurance costs (medical and auto), utilities and taxes - primarily school taxes. People have to work their tails off to keep a roof over their head. In some cases, people buy a house they can’t really afford.
4. America is in huge debt. We have lived on ever increasing credit for so long that we now face an economic catastrophe. The federal government is in huge debt and growing rapidly. US business is in tremendous debt. Most individual Americans are in serious credit card debt. In late 2004, the New York Times reported that since 1990, the number of people holding charge cards grew about 75 percent - from 82 million in 1990 to 144 million in 2003. The amount charged during that period grew by 350 percent, from 338 billion to $1.5 TRILLION. From the 1960s through the late 1990s, US households showed a surplus of varying degrees. But in 1999, US households started spending more than they took in - by about $50 billion. In the second quarter of 2004, the combined deficit of US households was $350 billion. Since US consumers make up two-thirds of the economy, they must keep spending to keep the economy moving.
While the US government, business and consumers are drowning in debt, note that China has about $2 TRILLION in cash reserves, thanks to all the consumer goods we buy from these countries. The Arab oil exporters have a similar amount of cash from petrodollars.
5. America is selling itself - a sure sign of a nation and an economy in decline. China, Japan and Arab petrodollars are buying businesses (including hi-tech defense contractors), ports, banks and even highways.
6. The federal tax code is a mess. Nearly every year we read of some organization sending the same tax info to different tax preparers and they all come back with different results.
7. Service jobs do NOT create a bigger economic pie. Service jobs take more slices out of the same sized pie. Jobs that create wealth and create a bigger economic pie must be stressed and tax laws passed to allow this to happen. These type of jobs are in the manufacturing and high tech areas.
8. Unions need to change the way they work and update their thinking to the 21st century. Work attitudes in many unionized jobs are really bad and this needs to change. Unions have put many companies out of business with outdated thinking and poor work standards. Unions must realize that they can’t keep getting more and more.