Great post: I would wager that most Americans believe the below three statements.
- Misconception No. 1: Most of what Americans spend their money on is made in China.
- Misconception No. 2: We owe most of our debt to China.
- Misconception No. 3: We get most of our oil from the Middle East.
Fact: Just 2.7% of personal consumption expenditures go to Chinese-made goods and services. 88.5% of U.S. consumer spending is on American-made goods and services
I quoted this number in the past in a comment and insomniasexx made the observation that her families business is able to out the "made in America" stamp on their products even when their raw goods are largely sourced from China. This could drastically skew the numbers, couldn't it?
What would really un-skew the numbers is if the report did not use the weasel "goods and services" what services do folks really think come from china? looking at goods like clothing and toys come from I would say a good 1/3 come from china and less than a fifth from the U.S.
A little farther down in the article:Just 6.4% of nondurable goods -- things like food, clothing and toys -- purchased in the U.S. are made in China; 76.2% are made in America. For durable goods -- things like cars and furniture -- 12% are made in China; 66.6% are made in America.
notice the inclusion of food in the list not exactly honest. The motley fool seems to be cooking the books by making unnatural categories or perhaps repeating spin.
I've heard this argument as well, but I don't think it would change much. Why? Because
None of those things seem to apply to insomniasexx's point. Maybe some housing materials, it's possible. But the rest are either intangibles or presumably domestic food. I think the article's idea stands firm, that goods in general represent an extremely small part of our monetary outflow, and thus Chinese manufacturing doesn't affect us as much as is assumed. When phrased like that, things seem to make a lot more sense. These were the numbers that really surprised me:
I would have assumed we buy a huge percentage of our cheap plastic Christmas gifts, our furniture, etc., from China.In 2010, the average American spent 34% of their income on housing, 13% on food, 11% on insurance and pensions, 7% on health care, and 2% on education.
Just 6.4% of nondurable goods -- things like food, clothing and toys -- purchased in the U.S. are made in China; 76.2% are made in America. For durable goods -- things like cars and furniture -- 12% are made in China; 66.6% are made in America.
FYI, this site does a nice job of explaining how the "made in the USA" process works.
Healthcare for example, Does this include medicines? Surely one of the most widely consumed treatments are antibiotics (for both humans and animals)
Yikes, that's a comprehensive list from the FTC. Health care ... hmm. You open a lot of loopholes with your points. Health care I would assume is predominately insurance, but does health care insurance fall into the "insurance" category or the "health care" category? If it falls into the former, what is health care spending? Great question, I think you're right that it's got to be prescription medicine in large part, which of course would bring those numbers under fire. It could also, however, be services rendered beyond what is insured (an extremely common medical expense for Americans) -- and those services are almost certainly American. I don't know enough about the subject to weigh one over the other.
So that leaves approx 30% for discretionary spending. Also, I would like to see what constitutes those categories. You would think that each one is cut and dry but people tend to get pretty creative when they're trying to make a point. I guess my point is that the authors point of "American Made goods", doesn't mean much aside from assembled in the US. My family provides parts for the automotive industry that can be labeled as US parts but they can source goods from elsewhere to go in to those parts. If you were to follow the raw materials of everything stamped made in the USA, my guess (and it's just a guess) is that many of the items wouldn't pass the BS test.
I think its a matter of who added the most value to the product. Apple puts, made in China designed in the USA on their products. Its an assertion that the value comes from American Engineers and Designers.
Apple does this because it has enough media attention that they couldn't get away with saying anything otherwise. My guess is that there are companies with less scrutiny that have "final assemblage" in the US and can call themselves a "Made in the USA" product. -Again, only a guess. Sorry for only having cynical speculation in this thread. I'll stop now.
I don't think that's relevant here, mostly because you can't add value to a service, really. The article points out that most of what Americans spend money are either really small things or services, and the services tend to come from America, plain and simple.
That is also a slight misconception, is it not? We might only consume a small part of it, but we still import a ton of it, refine it, and then export it again. That's how a lot of oil companies make money, if I understand it correctly.Fact: Just 9.8% of oil consumed in the U.S. comes from the Middle East.
If that's the case, which sounds roughly right, the statement is still true -- we don't consume that oil. And while we may make a profit off of Middle Eastern oil by refining it, we don't need it at this point in time, as evidenced by the fact that we don't use it. I would like to know exactly how much oil falls into that category.