The demise of U.S. manufacturing?

One of those persistent myths that keeps coming up is the diminishment of US capabilities such as in manufacturing. For instance, the idea that everything is made in China. The reality is somewhat different as Mark Perry notes in his blog: U.S. Remains Largest Manufacturer in the World

As much as we hear about the “demise of U.S. manufacturing,” and how we are a country that “doesn’t produce anything anymore,” and how we have “outsourced our production to China,” the U.S. manufacturing sector is alive and well, and the U.S. is still the largest manufacturer in the world.

Manufacturing is only one sector of an economy. There is the service sector that is often noted as growing rapidly in recent years as another, for instance. What Perry notes is that, according to government numbers, US manufacturing output is larger than all but two other nation’s entire output or GDP. As for those two others, Japan and China, US manufacturing output rates better than half those countries entire production in all sectors.

It is this reality that makes it possible for the US to suffer trillion dollar deficits without immediate financial catastrophe. How long is another matter, especially when there is such strong political bias towards the destruction of the US manufacturing through taxes and regulations for reasons not well founded in fact such as climate change.

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