Sign of the Times

I'm wondering just how the US economy can ever recover from our dilemma. My understanding of capitalism is that in order to build wealth under the system that something actually has to be produced.

We no longer really produce anything in the US, instead we consume (items "produced" in other countries) and tell ourselves that we are more "service" oriented. Without real wealth, sooner or later the pool of customers dwindles. This is where we are right now. We have a few truly wealthy people in this country, but frankly, servicing a couple hundred thousand people who have some money to spend on services will leave a large percentage of the remaining 300 million or so without a method of earning a living. Unless, of course, we actually produce something.

We tell our young that in order to increase their chances they need a college education. In order to accomplish that, they need student loans, the only form of "financial aid" available for the vast majority. So we saddle them with $100,000 or so of debt before they ever get their first professional position. With salaries on the downturn (since we aren't creating wealth, companies stay profitable only by decreasing expenses, i.e. salary), starting out like Sisephus is not a good sign.

Then we have the tax factor. The government takes 25% from even the lowest income individuals and as far as I can tell, there are no services provided for that bill. If you are among this lower bracket, you are screwed. Our taxes go to bail out bad business models and union employees stuck in job banks because there isn't enough work for them to have an actual function. That's largely because we don't produce anything anymore, certainly not anything that is affordable by the majority of our population.

Next, buying everything with money you don't yet have. They tell us consumerism is good for the economy. Not when you don't produce anything and not when you spend what you have yet to earn. It's exactly what the government is doing, but that won't work either. We spend money into a black hole that doesn't churn anything back out in the form of real wealth.

I am not a believer in consumerism, and I certainly don't believe in a "service-oriented economy". The trend is disturbing to say the least, and at some point we need to start producing actual goods that improve our quality of life and get the economy creating wealth again. Without this process the black hole just gets bigger.