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Morici: Manufacturing Is Key to Economic Recovery
09 Apr 2012 EDT - CNBC.com
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Barack Obama and his Republican challengers don’t agree about much, but they do agree the U.S. economy can’t be turned around, and middle class prosperity saved, without a strong contribution from manufacturing.

Since 2000, the economy has grown only 1.6 percent annually—not its 3 percent potential, as defined by productivity and population growth. It has not created a single additional private sector job. But for the alarming increase in prime-working-age adults choosing not to look for work, unemployment would be close to 13 percent.

Economists agree weak demand for U.S.-made products are the cause. Dependence on foreign oil and manufacturing are at the center of the challenge.

The trade deficit is about $600 billion or 3.8 percent of GDP. Each dollar that goes abroad to pay for imports but does not return to purchase U.S. exports is lost demand and lost jobs. Eliminate the trade deficit, GDP would increase $1 trillion, and 10 million new jobs would be created.

Currently, oil accounts for 44 percent of the trade deficit, and manufactures from China, Germany and Japan the rest.

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