ABSTRACT
During the past two decades a profound transition in the US economy has led to a significant decline in manufacturing competitiveness, and a growing weakness in domestic capacity. American macroeconomic policy also deserves substantial blame. The twin deficits, fiscal and balance of payments, reflect the failure of supply-side economic theory to match government expenditures with revenues and the propensity of America to consume more than it produces currently about 104 percent of GNP, as imports make up the difference. The end of the Korean War marked the beginning of the end of a coherent national policy of industrial preparedness. Programs and agencies which had proved their worth in an actual emergency were dismantled and existing statutory authorities were generally ignored and rarely funded.
