I agree, except that the government IS the problem. It is too big. It is trying to "fix" things that aren't broken. When there is a problem to be fixed (Air Quality in the 60's), it makes common sense changes but then can't leave well enough alone.

So, you're complaining that labor costs are too high and that is why people move manufcaturing over-seas.

You can:

1. pay people less money
2. Automate
3. Put up tarrifs

Which is it going to be?

On the taxes and regulations part, do some homework on different states in the USA. The states with less regulations and lower taxes still have significant manufacturing. Why do you think this is?

Patrick, you're in Ohio, right? How long would it take you to get all of the permits to setup a manufacturing business in Ohio? In Houston it is one day. One.

What are the income tax rates? Here, they are 0%. Business does have a temp 1% income tax IF you exceed $100K in profit. And that is about to go away.

Can you be more specific as to "If this were true"?

For the purpose of this discussion, we're assuming "outsourcing" is the exporting of manufacturing and labor to locations outside the borders of the US.

There are a myriad number of reasons why companies contract to others sources outside the company.

Sherwood

Sure. Don't buy poorly made products.

OTOH, all third world countries do not "automatically" produce shoddy goods. That depends on the manufacturer/source contractor. If you're a sewing contractor bidding for Walmart's business, do you think Walmart's specs include min. quality and employee workplace requirements over the bottom line?

Compare that with the products spec'd by/sold by Nordstroms, Laurent, Apple, HP and others and manufactured and/or assembled overseas.

You want to compare cars manufactured by GM and Toyota in the time period of the 90s?

Sherwood

Terms are important and this is one example where the term outsourcing has been corrupted. To be accurate outsourcing is moving an activity outside of the corporate or company structure. Offshoreing is moving a activity outside your home country. Multinational companies have activities worldwide and shift work for a multitude of reasons.
Some companies will outsource an activity to an offshore location. In some cases they will continue to control the activity but move offshore.
What is being discussed is offshoreing whether it is outsourced of controlled internally.

I know it's politically correct to say that. But think about it. The order brought about by government created an atmosphere in this country where business could thrive. Much of the wealth has been created under the protection and with the assistance of government. We have near universal literacy, decent roads and airports, a radio communication system that works, police and fire protection, safe(ish) food and water, Las Vegas (there wouldn't be a Las Vegas without the Hoover Dam) - the list is endless - all thanks to government that works. It's a mistake to look only at government's mistakes and over-reaches and conclude that government is the problem and can't be part of the solution.

I've been looking and can't find any US govt. reg. that specifically allows outsourcing. Can anyone assist?

OTOH, if this is simply an unwritten rule of supply and demand, then there was a tipping point at which time it was prudent for manufacturers to increase their bottom line by sourcing labor and/or manufacturing overseas. Perhaps taxes, EPA and safety regs. and cost of doing business combined with emerging nations with a plentiful source of cheap and educated workers.

On a business trip to Canada some years ago, I did notice a conscious effort to keep employment local. Now, they outsource. Their current unemployment rate, btw is 7+%. For comparison, ours is currently 9-10%.

Sherwood

I am not of the opinion that all government is bad. Nor is it all good. On balance since the mid-1960's the growth of government has done more wrong than correct. It (govt) has been on a quest for more power and control. At first it was for the common good, but as with all bureaucracies when it had completed its assigned mission it went looking for a new, expanded mission to feed the beast. In some cases the original mission was never accomplished and yet the agency grew to keep getting in the way of progress.

Take a look at health care, when did the growth of medical cost start to grow uncontrollably, it was after the passage of Medicare and Medicaid.

The Dept of Energy was to end our reliance on foreign energy, anybody see that anytime soon?

How have our school performance trended since the creation of the Dept of Education.

Anyone see a pattern here.

Don't think for one minute that all the regulations on business have helped keep American companies competitive. That does not mean that all reg's are bad.

Try the Constitution. Not trying to be too flippant but it is not up to the govt to allow business to hire someone to do something. If you hire a plummer to fix your pipes rather than DIY you are outsourcing.

On a more serious note I worked for the company (EDS) which was generally credited with creating the outsourcing industry. And all our outsourcing was done here in the USA until we started to work for foreign companies.

Again I think you are asking about offshoreing.

that will be a fun quote to try on your ER doc next time you're in

James - I assume that Texas - like other states in the oil (and coal) patch - derives a LOT of $$ from severance taxes. This allows lower business and personal taxes while still having some bucks to run the state.

Is that not true for TX?

State permits are not the bottleneck by far. It took less time to set up my business with the state than it took the phone company to get here and install the phone lines (8 weeks).

I helped rehab a building in Sugarland 3 years ago and I didn't see a big difference in the permitting process vs Ohio. Getting permits wasn't the problem, getting the inspectors to show up was. In my county here in Ohio they are here in less than 24 hours. Permits cost a LOT more down there and were more restrictive.

The EPA takes forever and is the bottleneck. So what are our choices? Deregulate so we can build fast and drink sewage or spend more so we can protect our water supplies without taking forever to do it? Deregulating isn't necessarily cheaper. We only have three factories in this town and we had to move our entire village water supply to a different aquifer because one of the factories contaminated the old one back in pre-EPA days. It cost taxpayers tens of millions.

Yes, Texas has no income tax. The other side of the equation is that it spends the least on its citizens, has the worst education record in the country and is over $80 billion in debt. ( Texas state budget - Sunshine Review)
Plus the whole state shuts down if a snow flake falls out of the sky. ;)

Ohio's budget is up there ($69 billion), but not as bad as Texas.

If it's not specifically disallowed, it's legal.

Texas

Revenue by Source for Fiscal Year 2010


<TABLE class=datart summary="The table lists the type of tax, the dollar amount, what percentage of the total revenue this tax accounts for, and what was the percentage change in revenue from the previous fiscal year for this tax" width="100%"><CAPTION>Tax Collections By Major Tax</CAPTION><COLGROUP><COL width="35%"><COL width="25%"><COL width="20%"><COL width="20%"></COLGROUP><THEAD><TR style="BACKGROUND-COLOR: #eee"><TH scope=col>Tax Collections By Major Tax</TH><TH scope=col>Amount</TH><TH scope=col>Percent
of Total
</TH><TH scope=col>Percent Change
from 2009
</TH></TR></THEAD><TBODY><TR><TH scope=row>Sales Tax</TH><TD>$19,630,305,704 </TD><TD>22.5</TD><TD class=red>(6.6)</TD></TR><TR style="BACKGROUND-COLOR: #eee"><TH scope=row>Motor Vehicle Sales/Rental Taxes</TH><TD>2,630,137,405 </TD><TD>3.0</TD><TD>1.1 </TD></TR><TR><TH scope=row>Motor Fuels Taxes</TH><TD>3,041,973,016 </TD><TD>3.5</TD><TD>0.3 </TD></TR><TR style="BACKGROUND-COLOR: #eee"><TH scope=row>Franchise Tax</TH><TD>3,856,865,935 </TD><TD>4.4</TD><TD class=red>(9.3)</TD></TR><TR><TH scope=row>Insurance Taxes</TH><TD>1,324,703,043 </TD><TD>1.5</TD><TD>5.4 </TD></TR><TR style="BACKGROUND-COLOR: #eee"><TH scope=row>Natural Gas Production Tax</TH><TD>725,538,388 </TD><TD>0.8</TD><TD class=red>(48.5)</TD></TR><TR><TH scope=row>Cigarette and Tobacco Taxes</TH><TD>1,388,764,873 </TD><TD>1.6</TD><TD class=red>(10.8)</TD></TR><TR style="BACKGROUND-COLOR: #eee"><TH scope=row>Alcoholic Beverages Taxes</TH><TD>809,233,737 </TD><TD>0.9</TD><TD>1.5 </TD></TR><TR><TH scope=row>Oil Production Tax</TH><TD>1,008,664,357 </TD><TD>1.2</TD><TD>14.0 </TD></TR><TR style="BACKGROUND-COLOR: #eee"><TH scope=row>Inheritance Tax</TH><TD>81,458 </TD><TD>0.0</TD><TD class=red>(95.9)</TD></TR><TR><TH scope=row>Utility Taxes</TH><TD>478,742,739 </TD><TD>0.5</TD><TD class=red>(7.7)</TD></TR><TR style="BACKGROUND-COLOR: #eee"><TH scope=row>Hotel Tax</TH><TD>330,809,436 </TD><TD>0.4</TD><TD class=red>(3.7)</TD></TR><TR><TH scope=row>Other Taxes</TH><TD>143,080,974 </TD><TD>0.2</TD><TD class=red>(8.6)</TD></TR><TR style="BACKGROUND-COLOR: #eee" class=total><TH class=total scope=row>Total Taxes</TH><TD>$35,368,901,064 </TD><TD>40.5</TD><TD class=red>(6.5)</TD></TR></TBODY></TABLE>

<TABLE class=datart summary="The table lists the revenue source, the dollar amount, what percentage of the total revenue this source accounts for, and what was the percentage change in revenue from the previous fiscal year for this source of revenue" width="100%"><CAPTION>Other Major Sources of Revenue</CAPTION><COLGROUP><COL width="35%"><COL width="25%"><COL width="20%"><COL width="20%"></COLGROUP><THEAD><TR style="BACKGROUND-COLOR: #eee"><TH scope=col>Tax Collections By Other Revenue Sources</TH><TH scope=col>Amount</TH><TH scope=col>Percent
of Total
</TH><TH scope=col>Percent Change
from 2009
</TH></TR></THEAD><TBODY><TR><TH scope=row>Federal Income</TH><TD>36,856,626,791</TD><TD>42.2</TD><TD>19.4 </TD><TD></TD></TR><TR style="BACKGROUND-COLOR: #eee"><TH scope=row>Licenses,Fees,Permits,Fines and Penalties</TH><TD>6,862,918,564 </TD><TD>7.9</TD><TD class=red>(4.7)</TD><TD></TD></TR><TR><TH scope=row>Interest and investment Income</TH><TD>1,058,575,154 </TD><TD>1.2</TD><TD class=red>(21.4)</TD><TD></TD></TR><TR style="BACKGROUND-COLOR: #eee"><TH scope=row>Net Lottery Proceeds</TH><TD>1,633,922,591 </TD><TD>1.9</TD><TD>3.3 </TD><TD></TD></TR><TR><TH scope=row>Sales of Goods and Services</TH><TD>408,052,872 </TD><TD>0.5</TD><TD class=red>(4.6)</TD><TD></TD></TR><TR style="BACKGROUND-COLOR: #eee"><TH scope=row>Settlements of Claims</TH><TD>557,255,238 </TD><TD>0.6</TD><TD class=red>(1.3)</TD><TD></TD></TR><TR><TH scope=row>Land Income </TH><TD>760,614,257 </TD><TD>0.9</TD><TD class=red>(3.5)</TD><TD></TD></TR><TR style="BACKGROUND-COLOR: #eee"><TH scope=row>Contributions to Employee Benefits</TH><TD>169,068 </TD><TD>0.0</TD><TD class=red>(37.5)</TD><TD></TD></TR><TR><TH scope=row>Other revenue sources </TH><TD>3,850,122,615 </TD><TD>4.4</TD><TD>4.2 </TD><TD></TD></TR><TR style="BACKGROUND-COLOR: #eee" class=total><TH class=total scope=row>Total Other Sources</TH><TD>51,988,257,149 </TD><TD>59.5</TD><TD>11.9</TD><TD></TD></TR></TBODY></TABLE>
Totals may not sum due to rounding.
Total Net Revenue = $87,357,158,214

Percent change in revenue from 2009 = 3.6%

Patrick,

The Wiki page you sent me to uses sources like the Houston Chronicle, and the articles do not cite where they found the data.

note #3 leads to this:

State services unlikely to escape Texas budget ax | Houston & Texas News | Chron.com - Houston Chronicle

to say "Some have put this at $20B" is meaningless, since the source is not given.

Exactly.
Just to add couple of more facts:
People tend to use more health care the longer they live
US life expectancy has gone from about 65 to about 75 since Medicare was passed in 1965.
The increase in US life expectancy can arguably be "blamed" on Medicare, which gave sick, poor, elderly people access to health care they couldn't otherwise afford. Government (in the form of Medicare) is being blamed for it's own success.

So how deeply is Texas in debt and what have it's citizens gotten for all the debt?
I think low taxes are great. But they aren't the whole story.

some info re corporate taxes:

Winners and Losers Under the U.S. Corporate Tax Code - NYTimes.com

Texas is not in debt, there is a balanced budget requirement.

There is a projected budget shortfall that must be addressed by the state legislature. This is in process and the cuts being made are to the spending for the next two years.

:)

The government has a fine track record at preparing young Americans to compete in the workplace. Elementary and secondary education, Subsidized and Unionized through and through. Have you had a conversation with a 16 year old who was educated in a public school system in any American City with a population over 200,000? Fail.

Oh, it's not the school's/teacher's fault? It's the parents fault? How has the government "helped?" Well, the government has increased subsidies to single mothers to the point that a father (wage earner) is no longer necessary. The government serves as every poor (and lower middle class) kid's daddy. Driving entitlement costs up and up and up. And who gets to pay for it? Evil big business of course.

Oh, it's not the school's/teache's/parent's fault? It's the kid's fault that he has a meaningless high school degree and no drive or ambition? How has the government helped? The government has created funding (more taxes on evil big business) for scores of "training programs" so that urban 18 year olds can receive training to be "construction project managers" whom can't read at the 5th grade level and can't divide 25 by 5.

So it's not the school's/teacher's/parent's/kid's fault that the kid is not prepared to enter the workplace when he turns 18? How has the government helped? They created the minimum wage of course. So business must be forced to pay a "living wage" to every unskilled, uneducated, unmotivated "government product" that walks through the human resources door. And then when "it doesn't work out", lets pay that same "worker" a year of "unemployment insurance"

And then we wonder why companies outsource.

Brilliant.

so no, WDFIFTEEN, it is not the government that is going to "fix this."

Google "State of Texas debt" and find ONE source that states "Texas is not in debt."

Or try this one:

BALANCED BUDGET? - STATE DEBT DOUBLED UNDER PERRY - TheCypressTimes