Austerity measures have they ever saved an economy?

But the money has to go somewhere, right? Even if it's being paid to the clerk for requisitioning the order form to send out the RFQ on a new hammer, then paid to another clerk for receiving the quotes from multiple contractors...it's still being paid to real, live human beings, who then can spend it on TVs and fast food hamburgers.

Well, except for the $1.25 "service fee"

I think what Jon is trying to say, though he's not articulating it very well, is that the service jobs we do in theis country that are "un-offshorable" do not produce anything that can be sold overseas.The off-shorable jobs, like manufacturing and mining and such, produce goods that can then be sold back to America. This creates a trade deficit.The point that Jon seems to be overlooking is that much of the jobs being sent over seas are still owned by American companies, so they don't technically contribute to a trade deficit.

Yes, and these are the jobs we're losing overseas. Leaving us with only jobs that don't produce anything that can be sold overseas. Which creates a trade deficit. Yes, the jobs are required, but if everyone is a hairdresser, a burger flipper, or a yoga instructor, we're left with jobs that are only useful for those in the immediate area, and cannot produce anything to be sold overseas.These jobs were necessary 20 years ago, too, but we also had manufacturing and other jobs that allowed us to sell things overseas rather than having to import everything we want to buy now. I believe that's exactly what Jon is blaming. Jobs that can be exported are the ones that allowed us to have trade goods. Now that they're exported, we no longer have trade goods, leaving us with jobs that don't produce anything to sell overseas. The very reason they can't be exported is the same reason they make nothing we can trade.

I never said we didn't have a trade imbalance. I was merely pointing out that the global economy is a bit more complicated than that. For example, I drive a Honda Accord and my wife drives a Chevy Malibu. One of those is considered a domestic car, the other an import. One was built in Maryland, the other in Mexico. The strange thing is, the "domestic" car was the one built in Mexico, the "import" was created in Maryland.The definitions are becoming blurred as companies that are nominally in one country actually do most of their work in another country or countries.When Apple sells an iPhone, it's considered a domestic product because Apple is an American company, despite the fact that it's being built in China. The money for every one sold ultimately ends up back in the hands of the owners and shareholders, who are largely in America, and who then buy the services that are all we produce anymore.In fact, the glass used in the iPhone screen is also produced in China, but again, the major company that produces it, Corning, is another American company.

Very true. I never intended to disagree with you. There very definitely is a trade deficit, and the exporting of our manufacturing base is a very large part of it. I was merely pointing out that it's not quite as black and white as it may have seemed you were indicating. True, but the major reason jobs get exported in the first place si that the workers get paid relatively little compared to a similar worker in America. So the vast majority of the money you spend on goods made by "American" companies in overseas plants does end up back in America in the hands of Sam Billionaire.Of course, having it in the hands of Sammy Bigbucks does nothing to help those laid-off employees in Oregon.

I'd say part of it is the myth of American exceptionalism. But a much larger part of it is that America always hhas been the center of manufacturing and innovation. The fact that the rest of the world, particularly China is catching up, is great from a global perspective, but from a local one, all we see is the standard of living going down.It's like with my dog. She goes into her kennel at night, and I give her a treat. She doesn't really deserve the treat any more, I'm no longer training her, but if she doesn't get it, she feels slighted. So, as Americans, we've been trained to expect these jobs and this standard of living, that, perhaps, we don't deserve.