See What Is Happening To Our Economy!

• Where Americans work

• Where jobs are available

According to the Bureau of Labor Statistics, the U.S. economy lost 98,000 private sector jobs in March, half of which were in manufacturing. Today, 13,643,000 Americans are employed in manufacturing, of which 9,849,000 are production workers.

Government employs 22,387,000 Americans -- 8,744,000 more than manufacturing. Even the category leisure and hospitality employs 13,682,000 Americans, slightly more than manufacturing. There are as many waitresses and bartenders as production workers.

Wholesale and retail trade employ 21,467,000 Americans. Professional and business services employ 18,036,000 Americans, of which 8,368,000 are in administrative and waste services. Education and health services employ 18,699,000 Americans.

Financial activities employ 8,228,000 Americans. The information sector employs 3,010,000. Transportation and warehousing employ 4,532,000. Construction employs 7,338,000, and natural resources, mining and logging employ 751,000. Other services such as repair, laundry and membership associations employ 5,516,000 Americans.

This is the portrait of the U.S. economy according to the Bureau of Labor Statistics. It is an economy in which government is the largest employer. Manufacturing employment comprises just under 10 percent of total employment and about 12 percent of private sector employment. Everything else is services, and not particularly high level services.

Is this a portrait of a super economy?

To help answer the question, consider that U.S. imports in 2007 were 17 percent of U.S. gross domestic product, according to the National Income and Product Account (NIPA) tables provided by the Bureau of Economic Affairs. In contrast, the BEA industry tables show that in 2006 (2007 data not yet available) U.S. manufacturing comprised only 11.7 percent of U.S. GDP.

If U.S. imports actually exceed total U.S. manufacturing output by 5 percent of GDP, it does not seem possible that the United States can close its massive trade deficit. Even if every item manufactured in the United States were exported, the United States would still have a large trade deficit.

If the United States cannot close its trade deficit, it is unlikely that the U.S. dollar can remain the world reserve currency. If the dollar were to lose the reserve currency role, the U.S. government would not be able to finance its annual red ink budget by borrowing from foreigners, as the U.S. saving rate is about zero, and the United States would not be able to pay its import bill in its own currency.

The rest of the world continues to hold depreciating U.S. currency because the dollar is the world reserve currency. The dollar is certainly not a good investment, having declined dramatically against other traded currencies.

From March 2007 to March 2008, the U.S. economy created 1.5 million new jobs (in services). Legal and illegal immigration and work visas for foreigners exceed U.S. job creation.

During the current school year, 3.3 million high school students are expected to graduate. If we assume that half will go on to college, that leaves 1.6 million entering the workforce. College enrollment in 2007 totaled 18 million. If we assume 20 percent graduate, that makes another 3.6 million job-seekers for a total of 5.2 million. Clearly, immigration, work visas, and high school and college graduates exceed the 1.5 million jobs created by the economy. Unless retirements opened up enough jobs for graduates, the unemployment rate has to rise.

The U.S. unemployment rate is creeping up, and according to John Williams (visit his website www.shadowstats.com), the official unemployment rate greatly understates the real rate of unemployment. Williams has followed the changes that government has made to the official indices over the years in order to spin a more politically palatable picture. Williams uses the original methodology prior to the decades of spin. The original way of measuring unemployment indicates the current rate of unemployment in the United States to be 13 percent, much higher than the 5.1 percent official number.

Williams also calculates the consumer price index (CPI) according to the same way it was officially calculated prior to the recent decades of spin. Williams estimates the current CPI at 12 percent, three times higher than the official 4 percent figure.

Williams reports that upward growth biases built into GDP modeling since the early 1980s "have rendered this important series nearly worthless as an indicator of economic activity." Williams estimates that U.S. GDP growth has been in negative territory during almost all of the 21st century. The notion that the United States is just now entering a recession is nonsense if we have in fact been in recession for most of the 21st century.

America's post-World War II economic dominance was based on the destruction of other economies by war and socialism. It is a different world now, and Americans have given little thought to the economic challenges of the 21st century.

Paul Craig Roberts is an economist. He served as Assistant Secretary of the Treasury for Economic Policy in the Reagan Administration. He was the Associate Editor of the editorial page for Wall Street Journal.

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