One of the biggest things that is ruining the US economy is outsourcing. However, I don't think there is anything we can do to bring manufacturing jobs back.
Politicians even PUSH for a service economy. That's crazy!
Ok. I'll bite.
A country cannot prosper unless it makes goods to export to other nations. Exchanging services within our own country just won't cut it! You don't GAIN anything that way.
This is a pretty bold assertion. I'll respond to this when you provide reasonable evidence that service based economies cannot bring prosperity, or failing that perhaps a reasonable argument.
A service-based economy logically benefits a society internally. When managed properly, a service provider should be in a state of economic equilibrium in the society in which it is based. Thus, workers are given a wage, and consumers are given a product, and the system sustains itself. What a service DOES NOT do (in most cases) is benefit a society externally. That is, the percentage of foreign currency which flows into the nation to boost revenues is assumably quite low for say, the medical field, in relation to heavy industry. And when you have an economy which imports more than it exports... Well, I think the problem in citing movement towards a service-based economy becomes worth considering.
Now, at some level, the service industry and heavy industry are linked. Even the heavy industrial sector relies on service-based elements to sell a product. The problem is that when heavy industry is outsourced, you not only slice a good margin of your workforce out of a job, but you also allow that company to divert its expenditures (and taxible revenues) outside of your internal economy. Now, the service industry suffers because they cannot sell a product to a consumer base that cannot afford those products, because they do not have a job!
Finally, if the service industry, in theory, supported itself, its employees, and its customers, consider the concepts above... The heavy manufacturing base reduces its presence in the nation at a high percentage, cutting down on internally traded goods, services, and raw materials (which are also goods), resulting in a net loss to the economic system. Furthermore, those goods are now imported, along with other imports coming into the nation. This also results in an outflow from the system. And then, because heavy industry is reduced, the gain from exports does not equal that of the loss from imports! If a simple model of this system was made, it might look like this:
[Summation of economic gain/loss] = (stable service economy) - (industrial outflow) - (imports) + (exports < (outflow + imports)) = [Economic loss]
Note again, that the service economy is an internal economic element, with no gains or losses (in our assumption). If our conomy was local only, it would be just fine. But in a global economy, is it even worth considering at such an important weight? If it's in a state of equilibrium, we might as well call it equal to zero. All that remains after that is a net loss. That system is doomed to fail.
Now, again, I'm no economist, and all my assumptions are from general things I've learned or heard of. If I'm wrong, or I could refine my view of things, please, do interject here and let us all learn something...
