our goods deficit is 10 times larger than our services surplus

http://economyincrisis.net/content/understanding-trade-deficit

The US Service Economy Cannot Keep Our Country Afloat Indefinitely

Many feel that the transition to a services economy heralds a new and prosperous future for the US. As far as services vs. goods industries, there are many differences that are clearly obvious. Regardless of these differences, however, it should be noted that our services surplus with the rest of the world only accounts for less than 10% of our goods deficit. In other words our goods deficit is 10 times larger than our services surplus which should indicate our ability to sustain global trade on the basis of a service economy.

* Services don’t export as well as goods – retail, hospitality, health care, government, and education are all local businesses. These make up much of the services industry.
* Services are labor intensive and not capital intensive therefore easy to relocate and outsource computer and electrical engineering, R&D and science, law, advertising, and accounting are all being outsourced. This has been seen as our jobs have been outsourced to India.

* Services require tremendous training and expertise – to be an expert in a field of service it requires expensive training for a long period of time and requires a high level of intelligence – not everyone will be capable of being an "expert."

* Services do not provide as much valued add – compare retail workers in Wal-Mart to factory workers at GM – one is ringing up a finished product at a check-out counter and the other is helping to turn raw materials into a finished product that can be sold anywhere in the world.

* Services cannot leverage capital – the amount of machines and technology used in goods production is much greater than in services these machines have the benefit of hundreds of thousands of hours of refinement and efficiency and can be run night and day whereas services businesses are limited by the productivity, efficiency, and skill of single-generation humans.

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• jobs, 2.3 million export, 2.7 million non-manufacturing service -marketreflections- ♂ (789 bytes) () 10/06/2010 postreply 08:29:01

• bulk of the increase in unemployment has come from non-manufactu -marketreflections- ♂ (2249 bytes) () 10/06/2010 postreply 08:53:53