The U.S.A. is at the 72% consumption level. No country can survive at 70 – 72% plus consumption without producing product. Why you ask? The answer is the nation must put the P-production back into the GDP. Since the 1980’s all we’ve heard was we will survive and even prosper in a service society. I didn’t buy it then and I don’t buy it now or ever. As Irving Wesley Hall said is his article, “What’s Good for General Motors is Now Good for China” he states, “The United States has degenerated from a world power based on industrial production to an overextended military empire based on debt and consumption. Our citizens have gone from well-paid industrial workers with comfortable savings accounts to cash-starved consumers with staggering credit card payments.
As bottom-line obsessed CEOs moved good jobs overseas, factory workers became Wal-Mart clerks selling Chinese products. For decades real wages have stagnated as prices continued to rise. Fifty years ago a man was able to support a family on a union member’s wages while his wife stayed at home to care for the children. Now almost half of private sector workers subsist on the minimum wage.”
The plain and obvious truth is wages drive demand the higher the wage the higher the demand! A wise old man once said you cannot sell something to someone who has no money.
There is no such thing as a service sector society. There is only the three legged stool mining, manufacturing and agriculture. What do you do with a stool? You sit things on it, and on the national stool sit services. Without the stool services crash to the floor and that’s what you see happing now.
All we hear today is free up money so banks can lend. They never answer the question how are people going to pay back the loan when the job has gone to China and India or their employer has cut their pay and benefits in this headlong race to the bottom?







