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problem in the U.S. economy.

Although there is some agreement that the 2001 recession was caused by a decrease in business investment, there is little agreement about what kind of economic policy would speed up a recovery. There is speculation that the long-term manufacturing downturn was related to increases in productivity (and the subsequent reduction in labor needs) and to competitive pressures (and the subsequent increase in global outsourcing). Both of these trends have resulted in a loss of capacity utilization and jobs in the United States. However, there is disagreement over whether the movement of production overseas has, on balance, a positive or negative effect on U.S. manufacturing.

It remains a matter of debate whether manufacturing production capacity is a vulnerable commodity or a strategic asset.



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