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Buying American?

By: 27 July 2011 4 Comments

Fire up that Google search engine and key in the phrase “buy American” when you get a chance.

You’ll be greeted with page after page containing listings of sites that express alarm over the loss of American manufacturing jobs, steer viewers to companies that make products in the U.S., suggest ways to correct trade deficits, etc. One of the sites that will rank highly if you run that search bears a very direct and self-explanatory title — How Americans Can Buy American. The owner of that site, Roger Simmermaker of Orlando, Fla., said he’s seen his traffic increase steadily lately as economic turmoil causes Americans to worry about their economic future and the impact of watching manufacturing jobs move overseas.

Simmermaker built his site around his book of the same title that is updated regularly and has grown to include links to American manufacturers, the place to sign up for an email list that touts American manufacturers and a journal of the author’s media appearances. Simmermaker said increased traffic to his site and others offering resources to those who want to purchase American-made goods and support U.S. companies is partially the result of people seeking out ways to do something that is increasingly difficult — buying goods made in the nation by domestic companies.

There is cause for concern, he says, pointing out that trade deficits speak for themselves. According to the U.S. Census Bureau, the national trade deficit in May — the most recent month for which statistics are available — stood at $50.2 billion. The Metropolitan Policy Program at Brookings reports that over 5 million manufacturing jobs — close to one-third of all jobs in that sector — vanished from the U.S. between 2000 and 2010.

Simmermaker said the country that benefits the most when manufacturing jobs are shifted from the U.S. is China. Last year, the U.S. trade deficit with China was $252 billion, down a bit from the record of $268 billion in 2008 and part of what Simmermaker said has become an alarming trend. He pointed out the trade deficit with China alone has come to $2 trillion and that figure should particularly concern those in the federal government that are worried about national debts and how to keep expected programs funded when less tax revenue is available due to the struggling economy.

$2 trillion in the U.S. economy, he said, could translate into as much as $600 billion in taxes without changing the status quo — that’s more taxes without raising rates on anyone at all.

“Had that economic activity taken place in the United States, think about all the problems we could have solved,” he said. “Buying American is not only important because of the jobs it provides, but also because of the tax revenue. … The government is in a debt crisis and needs money.”

Simmermaker said American corporations that manufacture goods in the nation pump in about twice the tax revenue of even those foreign companies that produce goods in the country. While Toyota, for example, might utilize American labor to manufacture vehicles for the U.S. market, Simmermaker argues the taxes generated by that activity largely benefit Japan. Vehicles made in the U.S. by Chrysler, Ford and General Motors, however, both provide jobs and corporate taxes for the nation.

Simmermaker  said the tax issue is a particularly thorny one as American companies that manufacture goods in the U.S. are at a disadvantage. Assuming there is a domestic, corporate tax rate of 22 percent and a tariff of 3 percent to goods coming from plants made in, say, China, Simmermaker said that 19 percent disparity results in an unfair advantage to foreign manufacturers.

He uses a poker table analogy. International companies as well as domestic ones want to reach American consumers, but sitting at that table — throwing in an ante — costs American manufacturers more than international ones. The solution, Simmermaker said, is to to up tariffs so as to level the playing field — to make sure it costs all players the same to reach American consumers.

Some may call that protectionism, but Simmermaker said such a move simply makes the rules of the game fair. He admits that cutting corporate taxes to make American businesses more competitive would also level the playing field, but that move would be counterproductive at a time when the government is running massive deficits and is in need of a lot of money in a hurry.

Economic concerns aside, Simmermaker said sites like his offer consumers the opportunity to research what goods are made in the U.S., to compare prices and to decide for themselves whether buying American is the right choice for them. He said consumers who take a look at what American products are out there might be pleasantly surprised.

Click here for more articles in this series.

About: Ethan C. Nobles:
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.

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