The power to fix the economy is within our collective control. Although it is likely the hardest thing anyone will ever ask you to do, the challenge for us is to focus 90 percent of our spending on U.S. products and services until we have surpluses again.
Let me explain why it is so important and how every time we spend our money it makes a difference in the U.S. economy, one way or the other.
Retailers can buy products from any number of sources. The reason that they purchase imported goods to sell to us is that our collective behavior has shown them the most important factor is price, even if it is as little as a few pennies. However, when they purchase directly from a foreign supplier, almost all the money the retailer spends for the goods goes to a foreign company. That company, if based in China, will use those funds to employ Chinese workers, pay Chinese rents, buy raw materials, and distribute profits to the owners in China. Little or none of that money is any longer in the American economy; it is simply drained away, putting us more in debt and making us weaker.
If instead, the retailer spends that money on a domestic supplier, with manufacturing facilities here in the U.S., then those dollars pay for salaries, rents and profit distributions here. The company also has to purchase raw materials, but those can be either foreign or domestic. Even though it is made in the U.S., some of the dollars for raw materials could still be going offshore. It is still much better than importing goods from another country. It is better for the company to be owned by U.S. residents so that the profits also stay here too, but it is not necessary to meet this challenge.
There are a number of foreign companies that have invested in U.S. manufacturing facilities and employ many U.S. workers. It is OK to buy a Toyota car made with 85 percent domestic content or a Stihl chain saw manufactured in Virginia. The important thing is that we buy products that keep as much of our hard-earned money as possible in our own economy, employing people here and allowing us to sustain real economic growth.
Every time a plant closes down in Denver or any other city in the U.S., those people become unemployed. Like many in the past couple of years, they are left searching for work, and it has been hard to find. When the plant closes, it impacts more than the people who worked there. The local government has less tax revenue. The restaurants, movie theaters, retailers, utilities and other service providers are all negatively impacted. The net result is that we have shifted economic growth away from our own country and placed it somewhere else in the world, making us poorer than we were before the plant closed.
Start to shift away from companies that have offshore phone support. Every dollar we spend should be on building our own economy, not someone else’s. We want to know if the materials the company utilizes are from American suppliers, but it can be really hard to tell. Each time we talk with a company we purchase products from, we want them to know they should buy from U.S. suppliers. It will mean paying a little more for the products much of the time, but it will be creating jobs for our friends and neighbors. Focusing 90 percent of our dollars on U.S. products will force foreign companies to open new manufacturing facilities here and allow many domestic companies to open plants or flourish. Refusing to accept offshore phone support will open call centers. It will drive growth in our own economy in so many ways. By keeping this commitment, you will be saving and creating jobs, maybe even your own.
Asa Beck, a certified public accountant, is president of Cogent Strategies and a member of the policy committee for the Coalition for a Prosperous America. He can be reached at ajbeck@congentstrategies.com.
