The State of U.S. Manufacturing

Alex Brill | Testimony before the Joint Economic Committee

The significance of manufacturing to the U.S. economy is undeniable, and the role and dynamics of this sector are important to study. It is critical to recognize, however, that manufacturing is but one segment of the U.S. economy, and the share of the resources dedicated to this sector should be determined by market forces, not government policy.

The role of policymakers should be to establish broad, effective, and stable policies that permit the U.S. economy to evolve as market forces dictate. Given that objective, policymakers should not seek to develop targeted subsidies or narrowly tailored economic policies for a single sector, not for one as large and important as manufacturing or for other smaller sectors. Instead, policymakers should promote economic growth by improving the U.S. business environment as a whole. Pursuing structural reforms will benefit the manufacturing sector directly by reducing costs and impediments and indirectly by encouraging growth across the entire economy.

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