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Why buy American made products?

"Why try to buy American Made products?”

Here is the reason I believe very strongly in American made products.

Since the 1960’s, America has been in a trade deficit. We import more goods than we export. In the 1980’s, the scale tipped even further, and in 2010, the trade deficit was roughly $500 Billion!

Here is a very simple example… You continuously sell $1.00 items to your neighbor, and he sells you $2.00 items. It will not take long, and your neighbor will have all the money and you will have none, especially because of the “throw-away” goods, which started in the 1980’s. (Throwaway meaning you can use it once or twice, and it is gone. Examples include Glad Ware and Ziploc containers, versus glass bowls and canning jars).

This same concept is much more complex when looking at nations, but holds very true. It is also different, what is imported and exported, when it comes to the economy and jobs. Raw materials are better to import than finished goods, because you can add value to them, and turn a profit. This is especially true, if we export the finished product.

For example, my neighbor Tom is a farmer. He needed more crop space, so sold some oak trees to my neighbor Bob, who cut them into boards, and sold them to me. I made them into birdhouses, and sold them to my neighbor Rick. Rick also owns the local gas station, and sells gas to all of my neighbors, Tom’s tractor, Bob’s sawmill and my truck for transportation. If each of us were his own country, we are imported raw materials and selling a product with value added to it. (Except for Rick buying my birdhouse). If everyone spends all of their money or barters evenly, no one is excessively rich, we are all living to meet our needs with no excess and no deficit.

Now, what if Tom, Bob and I decided we would buy gas from Sally down the street, instead of Rick, because Sally has more gas than her trading circle needs, so she cut the price. The short-term gain is that Tom will spend less money raising and harvesting crops, Bob can cut lumber for less money, making more profits and I can deliver birdhouses and have more profitability. HOWEVER, Sally is out of our trading circle, she does not buy groceries and milk from Tom, she does not buy wood from Bob and she does not buy my birdhouses. If cycle runs for a long period of time, Rick will stop buying birdhouses, because he does not have money from gas sales, as soon as he does that, I will stop buying boards and quit manufacturing, Bob will also stop buying timber to turn into lumber, and Tom’s price for his trees will plummet. Our little economy, destroyed.

Generations pass…I do not show anyone to build birdhouses, Bob does not show anyone how to cut wood, and Tom stops milking, since he cannot make money doing it. Now, our economy has a tougher time to rebuild, because we have lost the skill sets we once had within our trading circle.  

I realize there is much more to the equation than simply, we need to trade neutrally. Increasing exports, free trade, tariffs, taxes, shipping costs and more all mix into our global economy. We need to be more self-sufficient, use more goods made in the USA, and we need to increase our exports, which become difficult, when manufacturing is moving out of the United States. According to “American Manufacturing.org”, in January of 2000, there were over 17,000,000 manufacturing jobs. That number has declined under 12,000,000 in 2011. To me, that number is staggering.

In the United States, this has been happening since the 1980’s, and as a result, we have lost many manufacturing jobs. We cannot simple throw money at consumers and say, “buy more” and think it will rejuvenate the economy. The buyers need to be educated on trade, and understand that the reason why we are in debt to countries like China, is because for years, we were greedy, and imported goods to make short run profits, without understanding or caring about the long term implications of a trade deficit.

This is why I believe so strongly in buying American made products whenever possible, and making sure that my house never goes into a trade deficit.

 Chad Mathys

Owner- Barn in the Sticks