More Than 1 Million Manufacturing Jobs Could Be Created in USA if Americans Purchased More 'Made in USA' Goods – Economist Says

If housing were growing now at the pace it did until 2006, unemployment would likely be 2 percentage points lower and economic growth 2 percentage points higher.

And if Americans spent just $100 billion on U.S. goods instead of foreign goods – a gap that has widened in the last few years – then that would create more than 1 million jobs in manufacturing in the United States.

Those are two of the sobering statistics cited Wednesday by renowned economist and author Robert Aliber, professor emeritus at the University of Chicago Booth School of Business. Aliber was one of three experts who participated in a 2012 Economic Outlook forum at the City Club in downtown Cleveland. Aliber noted that the annual trade deficit has increased by $300 billion in recent years. Each $1 billion means 12,500 manufacturing jobs. Each $100 billion means $1.25 million jobs.

As far as economic impact, that doesn’t even count what these people would be spending as part of everyday purchases, said Aliber, whose latest book, “Manias, Panics, and Crashes,” was selected as one of the best investment books by the Financial TimesWhile the national election later this year has included debate about all sorts of topics, Aliber said, “the central issue should be thinking about which presidential candidate has a plan to reduce the trade deficit realistically and sustainably.”

Aliber was joined by Mark Schweitzer, senior vice president and director of research for the Federal Reserve Bank of Cleveland, and Charles Upton, professor emeritus of economics at Kent State University, who also taught at the University of Chicago and Rutgers University.

Schweitzer said the Federal Reserve is projecting economic growth of nearly 3 percent this year and about 3 percent next, with inflation remaining at low levels.

Upton, however, while he’s seeing some bright signs, said he has many fears about the future.

Near-term, he said, housing remains in disarray. Some estimates show that 29 percent of homeowners owe more than their homes are worth (although Upton said he thinks that’s a little high), and he believes foreclosures will remain a huge problem into next year. Economic recovery will be limited until housing settles down, he said.

Other worries Upton cited: many of those who are unemployed have skill sets that don’t match with demand, and many have skills that are no longer needed at the same levels. In addition, he fears what will happen when Social Security and Medicare run out of money.

Aliber agreed that the skills of the labor force remain a concern, saying there are 3 million to 4 million unemployed people who aren’t matched to demand. They will have to find jobs that pay less or will have to retire early, he said.

Despite all of that apparent gloom, Aliber said that housing is improving, consumer confidence is growing, and the monthly jobs reports are consistently positive.

When asked about oil and gas costs, Upton said prices are likely to continue to increase, particularly as demand grows in countries like Brazil, Russia, and China.

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More Than 1 Million Manufacturing Jobs Could Be Created in USA if Americans Purchased More ‘Made in USA’ Goods