The economy is hemorrhaging

Please read this post in conjunction with my basic position paper "What is this blog all about?".

Everyone knows that there is a serious unemployment problem in the United States, as well as a serious government debt problem. 

Under successive Democratic and Republican presidents, over a period of 50 years we have chosen to send millions of manufacturing jobs to China and other overseas locations.  As a result of losing the value-added effect and the decent wages in manufacturing, tax revenue declined substantially.  Also, we now have to import most of our manufactured goods, especially consumer goods.  Money is hemorrhaging out of our country to pay the interest on money borrowed from foreign countries and foreign investors, and to cover the negative balance of trade in manufactured goods. 

There is obviously a  huge difference between money spent by governments and private industry within the United States, and money going overseas.

For example, if residents of the United States buy U.S. government savings bonds, the government has to pay out interest to these people.  But the money is being given to U.S. residents and in most cases they will spend the money inside the U.S.  The opposite case is where foreigners buy U.S. government bonds.  In this situation, the interest is sent out of the country and is never seen again. 

The United States is suffering from at least five categories of money going out of the country.  I call this situation "hemorrhaging".  There is no word that more accurately describes the situation.

Here are the categories:

Negative balance of trade in manufactured goods - total for all foreign countries including China.  For 2009. 
$439 billion per year
(What about U.S. Defense Department purchases of manufactured goods from overseas sources, whether brought in to the U.S. or used directly at overseas locations?  Are these purchases included in the $439 billion amount?)

Negative balance of trade in manufactured goods with China (included in above figure)
$227 billion per year

Debt service on U.S. Federal government securities held by foreign countries (foreign debt).  China alone holds over $1 trillion of U.S. government securities, including an estimated 20% purchased through agents to disguise the size of China's holdings.  Foreign government holdings of U.S. government securities are closely related to the negative balance of trade in manufactured goods.  Estimate $100 billion.
(It probably would be better to look at all interest and dividends going out to all foreign governments and foreign investors, and all interest and dividends coming in to governments and individuals in the U.S., and get a net figure.)

Negative balance of trade with OPEC, as a way of estimating cost of imported oil
$166 billion in 2008 and $62 billion in 2009

Purchase of illegal drugs, with the money going to criminal empires in Mexico, South America, Afghanistan, and elsewhere.  Estimate $30 billion.

Spy operations.  Total $80 billion per year.  What portion is spent overseas?  Estimate $40 billion. 

Total military budget of $970 billion per year.  Estimate that 20% of this amount goes out of the country for local purchase of  fuel and other consumable items, to support U.S. soldiers in Iraq and Afghanistan, and in over 100 other countries and territories around the world.    Estimate $200 billion in round numbers.  

Foreign aid and military aid where cash is given to foreign governments.  Estimate $75 billion. 

Add up the figures and we get a nearly $1 trillion per year. 

The total U.S. government budget is about $2700 billion or $2.7 trillion.  So expenditures which could be reduced by rational government action, but which are now hemorrhaging at full throttle, amount to roughly one-third of the government budget.   (Not to say that the government is paying for all the above items, but just for comparison to show the magnitude of these money outflows.)

Even with a $14.6 trillion economy, there is a definite negative effect of nearly $1 trillion going out of the country every year.  It can't go on like this forever without causing major damage, which has already happened.  Look around America and the damage can be seen in terms of abandoned people, abandoned factories, and abandoned areas of cities.

PLEASE NOTE:  I welcome additions, corrections, deletions, related to the above list of cash outflows.