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Sunday, June 25, 2017

America Still Needs Investment

Unemployment is low and companies are making profits but growth beyond 2% is difficult. We can't look to labor and we can't look to corporate profits. We can look to where those corporate profits are spent and whether or not CEOs are gaining the highest return on investments. Putting money back into American made businesses can make a difference for the future economic vitality of the nation.

Much of this money is going overseas where companies over the past few decades believe they can make the most money. The problem is that that money is lost to Americans for purposes of improvement of national competitiveness and the balancing of government budgets. Reinvesting this money into productivity and expansion can provide greater growth for the nation.

Productivity improves on costs and production outcomes by enhancing workers skills so that higher quality products are produced. Training in skilled labor skills, general knowledge, and high technology industries helps both the American worker's wages as well as long-term profits of the company.

There is also the option of investing much of this money back into higher technology that improves the industries themselves. As cost and time saving equipment is added companies are better able to compete with the low cost providers overseas. Reinvestment can beat out lower technology industries with advancement.

There is also research investments that provide future dividends. Where new technology and skills won't return the industry to a competitive stance, additional research is needed to raise the abilities of these companies. Investments into new technology and products helps in the process of spring-boarding American companies forward.

We currently enjoy a competitive advantage and many of our companies have money to spend. Where they choose to spend it is another matter. From a strategic standpoint it makes sense to use that money to set up economic strength that can last well into the future. However, without reinvestment many of our companies will continue to set up operations overseas.

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