Outsourcing labor is a serious danger to America's economy and needs to be dealt with.

So, to round up the beginning of your argument, the term I should be using is offshoring, not outsourcing. But in my defense, the terms are used interchangeably nowadays. And I while I did say that only the top tier remains in the country in my scenario, I also pointed out my scenario was also intentionally oversimplified. It's impossible to include every variant of outsourcing in an 8,000 character limit. The point remains, however, that every time a group offshores, there are less jobs in whatever country they were based in, and that the money used to pay the foreign workers' wages is lost to the sending country's economy. Which, for our argument, is really all that matters. Just who loses jobs is largely irrelevant. The problem is, though, that you're looking at things in the short term. Provided, your predictions go maybe ten to twenty years into the future, but I'm looking a little further. I'll show you what I mean. As you rightly state, the country we offshore to receives a great deal of money from us. But if you look at the planet as a whole, there is only a finite amount of wealth to go around. It can be either money, or resources, or both, but at the end of the day, it's limited. From there it follows that when we give money to other countries, we have less. Regardless of how we move it around, whether prices of products go down, whether we invest in stocks, whether we get jobs elsewhere in the country, there's still going to be that massive drain on the economy, and on the US as a whole. And while our money gets other countries richer, we get poorer. It follows that unless we export as much as we import, we're eventually going to drive ourselves into a depression. And the US currently manufactures very little. In fact, for the most part our only exports are the raw materials that we send to foreign countries to be made into our own goods. We're also not going to be doing much exporting because, for the most part, other countries are doing just fine for themselves. American labor is expensive, so our goods wouldn't be any cheaper than theirs, and it seems a bit pointless to manufacture goods for export to support our purchases of imported goods anyway. In the scheme of things, it makes more sense for us to safeguard ourselves against other countries' economic troubles by manufacturing our own goods. If we depend on exports to fund our imports, then we run the risk of economic failure should the country we export to stop buying our goods. And of course if we depend on China for our goods and they have a civil war, we risk economic failure. For the most part, you're looking at employment, which is certainly an issue, but the fact remains that no matter how we shuffle money around, there's less every year. As there's less money in circulation, wages drop or we just print more and inflation goes up. But by some point, no matter how low prices drop, there's going to be a point where no one can afford to buy products. Or inflation will spin out of control with largely the same result. Take your pick, really. But that isn't to say that employment isn't important anyway. Put simply, only so many people can be employed as public servants, and it doesn't take nearly so many people to man a ship as it does to staff a factory. Unemployment is still going to be an issue. But even if we have more jobs for the time being, we're just stalling the inevitable. "Also note that the increased purchasing power of the foreign workers count: there is no reason to assume that they won't spend part of their extra income on foreign goods." So far, this one sentence is your only argument against the fact that offshoring is a drain on the economy. No offense intended, you've been focusing on employment instead. But anyhow. There's two reasons that won't work. The first is that we don't export goods to the countries we import from. They can't put money back into our economy if there's nothing to buy now, can they? Secondly, even if we do export to other countries more, so does everyone else. And I think you'll agree that most of the money we pay foreign workers will be spent on local things. So we're after the remainder. However we're competing with every other country selling product to our target consumers for that remainder. Needless to say, we won't get much of it. However, when we pay American consumers, nearly all that money would be spent on American goods (provided we actually produce any ourselves) and would stay relatively contained in our economy, where it would circulate around supporting everyone. Which is a much better system, in my opinion. "Indeed, no wage drop. One of the causes is that there is that the economic boost (explained above) creates new jobs, hence keeps the demand up, the offer of labor doesn't change, hence the wages stay the same." Great. But as I proved, the US has less wealth to pay those wages with, so inflation just goes through the roof instead. And US would have less jobs as a whole anyway, which would drive wages down a little. But probably not enough to compensate for the inflation. At any rate, same argument as before, eventually we can't afford to buy the goods these corporations are trying to sell us. Not all labor is moved to foreign countries because some jobs necessarily have to remain in the US. The "top tier" from my original argument does, certain groups have to remain to keep everything running smoothly, jobs that physically require people to be in the US have to stay here. "Main one is productivity: foreign labor has a low productivity compared to the Western countries." As far as I know, this is not true. The countries we offshore to have no legal obligations to not establish sweatshops or to have fair workdays. Additionally, in most cases, workers are paid by the product and not by the hour, which keeps productivity up. Regardless, productivity isn't even an issue when the labor is that cheap. The only time productivity is important is to weigh how much is costs to hire workers against how much work they can do. Even if productivity is low, if wages are low, you can hire many more workers and still get productivity up to par while paying less. Quality is also a bit of a nonissue. Since our governmental quality controls are essentially gutted we're left to the free market to determine quality. If there's no one with better quality and comparable prices, then there's no one worth competing with. And because it's so much more expensive to maintain any semblance of quality, those companies can't compete. I'll give you transport, but transport is comparatively cheap and is not much of an issue for these corporations. As for other costs, building factories and exporting materials are about the only things we need to worry about. We don't build up reputations or pay compensations to workers. That's why foreign labor is so cheap. And the private sector has everything to do with government. The government spends because of what the private sector does. Companies outsource. People lose jobs. The government has to pay unemployment to them now, increasing the national debt. Also, if there's less money in circulation, there's less to tax and less to pay it with. And I never said we should completely ban offshoring, because as you suggest, it's fairly impossible. What I do suggest is severely limiting it. All you have to do is set a minimum wage. If you said that all American companies have to pay the American minimum wage to workers, regardless of where they are, it would solve your problem pretty neatly. Without cheap labor, employers would come back to the US. If there's a shortage of labor, we can still hire overseas. As for offshoring by outsourcing, require the same thing of companies that your companies get involved with. End of problem.