Alright, let’s start this with some very basic economics.

The Gross Domestic Product is the measure of how much we make as a country. The basic formula to determine the gross domestic product is the sum of consumer spending, gross investment, government spending, and the difference between imports and exports. ( GDP= C + I + G + (X-M) )

So, from this, one will immediately see that the GDP (and thus the strength of the American Economy) is reduced by our reliance on foreign-made goods. This is partially true. The 2008 Trade Deficit $677.1 billion, according to the US Census Bureau. That’s $677.1 billion we sent overseas to purchase our made-in-China trinkets and Saudi gasoline. That’s nearly the total of the present stimulus package.

Of course, it’s not that simple. The outsourcing of goods allows those products to be produced at a lower price, allowing them to be sold at a lower price. If we didn’t outsource our production of these material goods we so love, we would instead purchase the versions made by foreign companies. We still want our products cheap, and really most of us don’t care where it came from. Furthermore, when those foreign companies wish to invest their capital, historically the place to do so has been in US capital markets, like the New York Stock Exchange. So we do actually get quite a bit of that money back.

Still, $677.1 billion is a lot of money, until you compare it to the overall GDP. According to the CIA World Factbook entry for the US, the 2008 estimated GDP was $14.58 trillion. Information provided to me by the Hoover Institution places that as -6% of the GDP. Eliminating that entirely would increase the GDP by only 4.44% (feel free to check my math, it’s my weakest subject.)

So, buying completely domestic, apart from reducing standard of living by lowering purchasing power through increased costs of all goods, would be only a minor change. The area that needs to be focused on is Consumer Spending. Consumer Spending accounts for a whopping 70% of the GDP (gross investment accounts for 17%, and government spending 19%, with the previously stated -6% trade deficit, according to the Hoover Institution.) So what we really need isn’t a lot of talk about people buying American or any of that. Gobalization of the economy benifits not only us, but other nations as well. Mercantilism didn’t fare very well and we don’t need to bring it back.

What we need is people to spend money. Part of this is the Credit Crisis, for sure. People can’t get loans, so they can’t spend the way they’re used to. However, instead of spending the money they DO have, people turn to saving money. There’s a lot of things you can buy without needing a credit card or a loan. Used to be, that’s the only way you could buy anything. But we’ve become a society who’s entire system is based around debt.

Reports from the Wall Street Journal today (read along at: http://online.wsj.com/article/SB123574078772194361.html) have the GDP contracting  6.2% in the fourth quarter of 2008 alone. Expecting loss between 5 and 5.5% in the first quarter of 2009. By the third quarter, estimating *growth* of 1.6%, with growth projected for 2010 at 3.1%.

What this tells me is we’re almost through this, people. We won’t be back where we were by far, but we’ll be through the toughest part.

“But what does all this economic jargon mean to me” you might ask? It means there isn’t a concern that we’re going to enter a Lost Decade like Japan, or suffer a full-blown depression. It means you don’t need to horde your money in tin cans in the back yard. It means you should understand that you really do spend your way out of recessions.

Don’t go blowing your life’s savings in a fit of altruism, but with consumer spending being such a larger percentage of the GDP, even a minor downturn (a 4.3% downturn in fourth quarter consumer spending accounted for half of the loss of GDP) can gravely affect the overall economy. So do us all a favor, and when you’re debating as to whether you should save some extra change, or get that Starbucks latte you really want, succumb to temptation and buy the latte.

Spend money. Save America.

I had a discussion with some associates of mine today about “what is art” and other such examinations; the conversation basically achieved nothing, but it got me thinking, and thinking is the fuel for … well, whatever it is I’m doing here, which is pretty firmly established as not being art, whatever one’s definition of art may be.

One of my teachers this semester (Economic History of the United States) told us at the begining of the class that his goal in life was to save the world. This was his reason for having worked as a diplomat with the state department and just about everything else he had done in his actually rather interesting life up until the point he was teaching community college classes. Out of everything he’s done, teaching is the most likely to fullfill his goal of saving the world.

So, I’m rather selfish. I know that, and I’m not planning on changing that any time soon. But I did start thinking back about all the things I used to want to do, and what I’m doing now. Right now, I’m pursuing a business administration degree, with a focus in human resource management. Ostenisbly, this is because I feel it will help in getting a job that will be able to pay well, or ideally to expand my skillset to the point of opening up my own publication. It occurs to me that my goals have become rather low.

Just a few years ago, when I thought “How do I want to make money in my life?” I came to the conclusion that I wanted to pursue a particular masters degree program at the Monterey Institute for International Studies, the program in Foreign Trade Policy. The requirements to get into this is a bachelors in Economics with a minor in Linguistics and fluency in at least one additional language, if not more. I wanted to take this degree and find myself analytic work examining international markets, either for the government or for a private firm, didn’t care which. I felt that, by doing this, I would not only be giving back to the world, but doing so in a field I dearly love, and be well rewarded for it.

So, when did my plans shift to opening a publication on any random subject? I work in graphic design, yes, but my interests are almost all elsewhere. I like working in publishing because of the puzzles it presents, but have I really lost sight of my long term plans in exchange for the shorter term picture? Have the mundane details of existence really pushed me to a point that I’m willing to forget about what I truly want to do in pursuit of establishing the resources needed to pursue said dream?

And how many times am I going to try shifting my degree program before I finally sit down, shut up, and finish one? The world may never know.