Another item pertinent to this thread: the nonpartisan Congressional budget Office, in reference to the President's budget, said " Mr. Bush's tax and spending plans would, if enacted, will add $737 billion to shortfalls otherwise expected over the next decade". Total addition to the deficit over that period = $2.75 trillion. Anyone, politican or not, that believes that our government credit card has no limit is dreaming and that dream WILL become a nightmare. My grandfather used to say, "If you dance, you will have to pay the fiddler". Sadly, it is our children and grandchildren who will pay for our dance.

 

these arguments are all good and well, but you guys are forgetting one thing- if everyone paid the united states what they owe us we would not be in debt, and we would not be having this conversation.

 

We live in uncharted times. No country in history has made the transition from a manufacturing superpower to a service industry superpower, but that's where we're headed. Continual bashing of business by the Left will prevent new industry from coming to the US even though, in many areas, US productivity outweighs our higher wages. Said another way, if it takes 1 American to build a car, it take 3 foreign workers. One of the reasons that the jobs haven't already rebounded with a vengence is due to the fact that the American worker has become considerably more productive, overall.
If we want new industry to invest in the US, we need to stop treating them like "the enemy".

 

That's going to be difficult with our semi-isolationist foreign policy. With the exception of current Iraq Coalition members dependent on our aid and trade loan guarantees and Japan/S. Korea (the customer is always right), we pretty well told the rest of the world to take a flying leap with our jaunt into Iraq and that resulting mess. The IMF and other developed nations are well aware of our fiscal problems despite the PR our public happily consumes. Investment in US manufacturing currently would not be a recommendation any responsible advisor would make, regardless of our forced gains in productivity.

We do need to make some major policy changes, but as you point out, we're in uncharted waters. I think Powell is probably the only cabinet member of the current administration who truly understands the scope of our domestic problems, and that's due to his intimate foreign exposure to world leaders and superior intelligence. That means little when advising giant egos structured by past success in the US business community who are grasping for favorable mention in future history books.

 

[QUOTE]Originally posted by georgedavila
That's going to be difficult with our semi-isolationist foreign policy. With the exception of current Iraq Coalition members dependent on our aid and trade loan guarantees and Japan/S. Korea (the customer is always right), we pretty well told the rest of the world to take a flying leap with our jaunt into Iraq and that resulting mess. The IMF and other developed nations are well aware of our fiscal problems despite the PR our public happily consumes. Investment in US manufacturing currently would not be a recommendation any responsible advisor would make, regardless of our forced gains in productivity.

I wasn't speaking about foreign investment in the US; there's plenty of foreigners investing in the US, believe it or not. The problem is that many US businesses aren't investing in new manufacturing in the US and are moving existing manufacturing off-shore.

We do need to make some major policy changes, but as you point out, we're in uncharted waters. I think Powell is probably the only cabinet member of the current administration who truly understands the scope of our domestic problems, and that's due to his intimate foreign exposure to world leaders and superior intelligence. That means little when advising giant egos structured by past success in the US business community who are grasping for favorable mention in future history books.

I don't know what "giant egos" you're referencing, so I can't comment on the last statement.

 

The current appeal of offshore manufacturing facilities is a lower delivered product price from a full spectrum of income statement savings, cost of goods sold (labor/materials) and operating overheads which include current facility cost, maintenance, government compliance and those all important state/local taxes.

Even if by some means like a world depression general domestic wages could equal those available offshore or our efficiency virtually eliminates cost of goods sold labor, facilities now being constructed offshore are far less expensive with lower income statement and cash flow impact over their 20-30 year life, as is maintenance, compliance and other operating costs which drive gross and net profit margins.

The largest primary considerations for moving a facility offshore are currently labor, compliance and operating costs, but state/muni taxes are also becoming a major obstacle in attracting investment in US facilities as our Federal government continues to pull formerly shared revenue out of state coffers to avoid raising taxes, resulting in explosive increases in local property, income and use taxes. Looking at our rapidly deteriorating tax bases at national and local levels combined with record government expansion and spending, there's no where for those taxes to go but up, way up.

I would personally prefer to see US investment in US facilities, but on a current and long range basis, there's zero financial justification. Virtually all foreign companies who have and are locating manufacturing facilities in the US have free rides on local taxes and infrastructure for the life of the facility, a misguided effort by local politicians seeking to remain in or gain office to attract badly needed jobs, which places the tax burden on those $8/12/hr workers and the small/large businesses serving those community consumer requirements. But I'm sure the residents are overjoyed to have work, taxes or no taxes.

 

I believe in numbers. I believe that numbers do not lie, but that people often lie with numbers. In 2000 Mr, Bush said that his tax cuts would leave Social Security solvent. He aired an ad that he was going to set aside $2.4 trillion "to strengthen Social Security and pay all benefits". That 2.4 trillion, like WMD, has vanished. Interesting data (article, Washington Post): "... if you add up the costs of all legislation under Mr. Bush - measured as either new spending or lost revenue - the tax cuts account for 55% of the total cost. Defence, Homeland Security and international aid account for 30%. New entitlements count for 13%. The tiny percentage left over is for every thing else". Alan Greenspan, a Republican noted for cautious statements, has stated that Social Security is unsustainable and that the tax cuts must be FUNDED by spending cuts, not credit. At last someone credible is speaking out and placing our fiscal problems on the table. We have some bitter pills to swallow, but a problem is not solved by ignoring it, and this problem (debt) is a cancer that will continue to grow until it brings us down unless it is confronted. Will Bush do that? No, based on past performance. Kerry? Edwards? I detect no signs they are willing to step up. It is said that the sqeaking wheel gets the grease, I only hope that enough of us (Republicans, Democrats, liberals, conservatives) make enough noise to bring this to the front. I can tell you they (my reps) hear from me.
GET MAD - pretend the '05 F150 will be using a Chevy engine.

 

It's not quite as simple or gloomy as you paint it, though. There are still US companies building and expanding manufacturing capabilities in the US. Since this is a Ford Forum, did you know that Ford is spending several hundred million dollars upgrading its Wayne Assembly Plant so that ALL Focus production can be done there? Present Focus production is shared between Mexico and Wayne.

 

re:That is why despite productivity being better here, it still might be better for a company to pay 20 chinese to do the work without the newest equipment.
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Hmmm I am going to eg to differ on the fact that it may be better...

1. The balance of American productivity vs quality control is among the best in the world....the main problem is this....major corporations are short sighted when it comes to finances....they pay 20 Chinese to do the manual labor,
Quality goes down the tube....then their way of life improves, labor gets organized.....they will soon have to cover sick pay, benefits etc...
the savings are temporary....

2. The 10 million dollar piece of equipment (I know this I used to handle equipment like this) requires an operator 24/7 to be considered extremely profitable....

The 10 million dollar piece of equipment requires a skeleton maintenance crew that usually crosstrains on other pieces of equipment....and access to
field reps that the equipment manufacturer can supply on a contractor basis.

The biggest problem here is the corporate greed and short sightedness of their moves....they recently got a healthy tax break and an administration that won't enforce trade agreements and stipulations....

When Reagan and Bush Sr were in office they forced Japan (then in a huge
trade advantage) to honor the trade agreement....by sticking them with stiff tariffs....which is why they shipped automotive manufacturing plants to Canada, US and Mexico....to avoid these tariffs....

As you can see it is not a Republican/Democratic thing......it is about
people who get hired to do a job and don't follow through....because they are too busy with their own agenda to worry about the common American.

If you don't believe my productivity theory, then why did our semi conductor plant in Santa Cruz, consistently outproduce the plant In Germany, Singapoer and the Phillipines EVERY quarter?

We also had less downtime and less process errors causing losses of revenues....but the revenue to profit ratio wasn't as good because of our higher cost of labor and benefits....regardless of the quality. If you graphed the two...our profitability graph would exceed that of the foreign site over
a longer period of time due to productivity and quality control.

The main reason our plant shutdown was the state and city/county taxation
was costing too much along with the downturn of the economy. Much of our workforce was integrated into sites located in Texas, Germany and Arizona....