Making Good on the American Dream

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American Thinker:

The ever-growing list of nations facing severe budget, debt, and unemployment problems headlined by Greece, Spain, and the United States has two factors common to all its members. They are all either confirmed to be or determined to turn into socialist democracies, and they have evolved into overwhelmingly consumption-based societies, while greatly diminishing their goods-producing sector, thus eroding their job-creation ability as well as the nation's wealth and tax base.

Nearly 80% of the economic infrastructure of the United States is in the service sector. In addition, over 71% of the Gross Domestic Product is made up of consumer spending; thus, the annual GDP growth is highly sensitive to personal wealth and after-tax income which the president is determined to reduce.

Any economy so dependent on a service sector (which notoriously pays lower wages) and consumer spending will, in due course, begin to feed upon itself in an unsustainable manner particularly as government absorbs more capital and revenue to maintain its social promises. As the goods-producing sector, which generates the real wealth of a nation, continues to decline, the consequences are there for all Americans and Europeans to see: job-creation, per capita income, and personal wealth begin a long-term downward spiral along with the inevitable and attendant reality of many governments facing insolvency.

In the United States this trend has been accelerating for many years and has greatly affected the composition of the labor force, incomes, and growth in the economy. While still a large producer of goods, due to its size of the population and economy, the nation has experienced a precipitous drop in its onetime world dominance. The proof is in the ongoing dilemma of job-creation and unemployment.

As recently as 1995 the goods-producing sector of the economy accounted for nearly 20% of the jobs in the United States (36% in 1965). In 2000 that percentage had fallen to 19%; as of June 2011 it was at 12.9%.

In June of 2011, 18 million people were employed in the goods-producing sector; when Obama assumed office in January 2009 19.6 million were employed in this arena. There has been a loss of 1.6 million high-paying jobs in the past 30 months alone.

Therefore by necessity there has been a noticeable shift in employment patterns into much lower-paying jobs in the private sector. While the overall economy has lost 2.7 million jobs since January of 2009, employment in the service sector has increased by 675 thousand. However the growth has been in the hotel and food service sector (380 thousand) and health care and social assistance (750 thousand). Since 2000, employment in the hotel and food service sector has increased by 1.3 million, and in health care and social assistance, 6.5 million, while 7.6 million value-added jobs in the goods-producing sector have been lost.