We are told it’s better to consume than create.
Everyone knows China is growing rapidly and that America and Europe are in decline. The reasons are obvious enough for everyone to see and understand. Americans have developed a mentality of consuming more than we produce, of living beyond our means, of being profligate with the riches our land and ancestors gave us. The the US and the world must enter a balanced economy at some time, where production equals consumption, or if that doesn’t happen, the population and consumption will overshoot the resources available, and a collapse to a much lower level will occur.
Who will be making our future goods?
Americans have chosen to import the manufactured things we love to consume, but that means we have exported the jobs and machinery that make those products. We concentrated our efforts on education and creativity because we are told were going to make new classes of products and leave the old routine stuff to be made by foreign workers. However, if you visit a major university, such as Cal Berkeley or MIT, you will quickly observe a majority of the students in the hard sciences are obviously foreign born. These people will take our latest technology back to their home countries; thus any special intellectual progress made here will be manufactured abroad. Not only the routine manufacturing but the machinery and newly created techniques are now going abroad. Even the most creative native born Americans are now being exported because foreign countries are willing to pay for their expertise.
Who is going to pay for our present squandering?
The pundits say we are putting our children into debt, and we should ease up on our profligate spending, or they in their old age won’t have any Social Security. It’s a weak argument and unconvincing too. The proof of its failure to convince is the huge fleet of gas-guzzling cars roaming our streets. Very few people walk to the store to buy their groceries, and very few buy the smallest car that will cover 99% of their transportation needs. Instead they buy the biggest one they can afford, many of them on credit, which then guzzles more of their non-existent money every time it moves, and of course depreciates with every tick of the clock. They excuse the excess spending by claiming the 1% usage of the big car’s excess capacity makes it essential. Where does the money come from to support this squandering, but from those people who are actually producing goods; and from our past savings which are now being exported to buy goods made with machinery and jobs our financiers shipped abroad? Who is going to pay? Everyone! Everyone of us is now paying for the squandering of those around us.
We are already paying for our past mistakes.
Millions of American potential workers are already living off their relatives. College graduates who can’t get a job are a particular tragedy, because the jobs they might have gotten have gone abroad. These adults living with their parents, and on other forms of welfare, have spent years of their lives and thousands of dollars getting an education, the benefits of which are slowly evaporating away as they watch Seinfeld reruns. Our President keeps saying the good times will return if we, who still have money, spend more money, because that flow of cash will create jobs to make these new products. The obvious fallacy of that argument is that the jobs created by spending money will be foreign ones and the money we spend will go abroad to support those workers’ households. That leaves our unemployed parent-bound American adults changing the TV channel over to Tosh.O to watch semi-suicidal antics of desperate people.
An American worker’s job will return when his wage equals a World worker’s wage.
Jobs won’t return until American workers are cheaper than Chinese workers. Why cheaper? Because the equipment the Chinese have now built into their productive infrastructure is new and fully functioning, but American tooling is old and has been abandoned. It costs a lot of money to build new factories, and those factories won’t be built where the cost of labor is high and the productivity is low. Therefore, those types of jobs won’t return until the American worker’s wage equals the wage of the World worker plus the cost of infrastructure replacement. Unfortunately, because the world population is continuing to explode the price of food will rise and the world worker will be forced to work all day for the price of his food. Now that’s bleak! The best strategy for a young person is to buy and own outright the place where he resides, no matter how poor, and when he has enough to buy debt-free a better place to move up only that amount. If a residence is too expensive to buy, then buy and share, or buy and rent out a portion to cover costs. But – never, never pay rent yourself, because when tough times come the rent will have to be paid or you will be on the street and desperate.
America will remain a wonderful place to live – if you have money.