More good points - Posted by randyOH
Posted by randyOH on January 06, 2003 at 19:29:06:
Ron,
You also make some good points. There is no doubt in my mind that our standard of living has been increasing. How much of that has to do with the loss of manufacturing, I do not know. I suspect it has to do mostly with technological progress.
You are probably right that the U.S. will continue to prosper despite the loss of manufacturing from the economy, at least for the near future. Certainly history, so far, is on your side.
However, history is a long time. In terms of the history of civilizations, the U.S. is a blink of the eye.
Many great civilizations have prospered for periods greatly exceeding our short history and have eventually fallen. I believe the Roman empire lasted almost 1,000 years. But it eventually collapsed. And I believe the reason for the fall of Rome was primarily economic.
So I continue to have doubts about the long-run effects of transferring almost all of our manufacturing activity to other countries. The consequences of running a $400 billion trade deficit may be positive in the short run but negative in the long run. But, as Keynes said, in the long run, we are all dead. So, yes, you and I will probably be long gone before the negative effects of the trade deficit are realized. But, our grandchildren may not enjoy as good a standard of living as we have.
So, bottom line for me is that I do not believe that the U.S. can sustain its current level of prosperity if the current economic trends persist. I do not believe that an economy can thrive on services alone. For a while, yes. For the long run, no.
Just the way I see it. I am not an economist, I am just guessing about this stuff. I may be totally off base. But, I think it is an interesting subject nontheless.
Randy