Minyan Mailbag: Services Market
In an open system, the U.S. could exchange services for those materials.
My son and I had a lengthy discussion about this the other day. Can an economy that provides only 'services' exist?
Obviously, certain 'industries' such as the defense community, selected homeland defense electronics, agriculture, financial services (do you trust your money to a bank in China?), home construction, entertainment, and some others are not fungible.
As Richard Russell would say, our principal manufactured product is dollars.
Yes. If the economy can exchange services for materials needed. Of course, this is impossible with a closed system, like an island, because both must be produced.
In an open system, the U.S. could exchange services for those materials. But it would be necessary for the services to be of value so a balance of payments is maintained.
That is not what is happening. The U.S. is borrowing capital to pay for materials.
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