Excessive Spending - Spiraling... which way?

What happens as a result of decisions which result in importing goods at a significantly higher rate than exporting them?

On the positive side:

• jobs related to importing goods are created
• lower cost goods are available to U.S. consumers
• U.S. companies are able to assemble products made from lower-cost components
• U.S. companies are able to significantly reduce costs associated with labor, including benefits
• higher cost producers are driven from the marketplace as competition escalates
• individuals are pressured to become more productive and competitive

On the negative side:

• core production capabilities are moved out of the U.S. reducing U.S. strategic capabilities
  
• U.S. dollars are used to compete against the U.S. in obtaining critical resources
• U.S. dollars are reinvested in the U.S. by foreign companies increasing their control of the U.S. economy and political influence
• well-paid production jobs are replaced by low-paid service jobs

Right now, it is believe by many that the trade deficit of $0.5 trillion per year is not a significant issue. They do not make a connection between a manufacturing economy and wealth creation; rather they see the U.S. moving away from an "old style" economy into one based on "intellectual capital."

Well, that's a nice theory, but reality sometime gets in the way:

• Those high school graduates who hold down manufacturing jobs will get college degrees and work in the intellectual sector... or maybe not.
• The U.S. will become the supplier of ideas and know-how to the rest of the world... or maybe not.
• The U.S. can continue to use the current model of importing goods and services to remain economically strong and avoid inflation... or maybe not... indeed!