I might be wrong but i believe that if a country does not sell to those outside it's borders and remains an enclosed market place it will inevitably stagnate. All the money is just churning around in the system. We are, as we say here,' paying each other to take our washing in.' This is not going to generate wealth. I have to also admit that it is generally viewed here that the standard of living in US is perhaps artificially high and higher for your average person than it would be in Europe. Perhaps there is a sense that people have got used to a standard of living that they are not, in effect, earning. A bubble that surely has to burst?
You are dead on the money with most of this. The thing is that the US has never been a closed system. We could buy an sell almost anywhere. It just was not free trade.
Lets say a local company makes a tv an its costs then $150 to build it an get it to the shelf of a local store. Butt another company in India makes the same TV an cause of wages an other country issues, it can build it an get it on the shelf of that same US store for $100. The US would tax the TV from India at the border about $50 so when you went to the store to buy a TV both would cost about the same price. The US company still had to compete on price but only with other US companies that had the same minimum wage an government rules. The only think he had to compete with the Indian company on was quality.
You at the store would just see 2 TVs at around the same price. You would usually choose the one that you though was better quality.
If you chose the US TV, you were happy to have a good TV an your neighbor was happy to have a good paying job.
If you chose the Indian TV, you were happy to have a good TV, The Indian company is happy the sold a TV at the price they asked an the US government was happy to get cash to pay its bills.
That was how the system was to work anyway. Like anything in government it was far from perfect. It worked ok though. Up until about 1990 almost every town in the US had a factory that gave everyone good jobs an the tag "made in the USA" was known as the highest quality.
Then free trade started...Ross Perot told everyone what free trade would do back in 1992.
He was exactly right. We can not compete even on quality when cost per worker is mandated at 8 to 10 times that of the countries we are trading with.
Import taxes did make a bubble an free trade busted it. We are in a free fall an will fall until we are on the same level as the worst off country we have free trade with. Maybe lower if we dont pull some regulations but I think at some point cost of shipping will be what save us. VW just built a plant in the US. Cars cost a lot to ship so I assume that is what made the numbers for a US plant work again.
The US standard of living is way above most of the world by artificial means. The standard of living for people on welfare in the US is above most people that have good jobs in the rest of the world. People think they are owed that or better. They want $15 an hour to for a no skill job or they expect the government to pay them a fat check to stay home. An the government is doing it so these people will keep voting for them. $17 trillion in debt an climbing says it is going to crash hard...
What happens when the masses in Atlanta dont get a government check one month. In there mind they are owed that standard of living. We talk about war zones everywhere else but when those checks end the US will become a 3ed world nation in war.