The unemployed spend less money. Less money being spent means lost sales at local businesses. This reduced profit decreases shopkeepers purchases, which decreases the sales of other businesses and so on down the line. Less money being spent means less tax revenue being generated. Decreased tax revenue results in decaying infrastructure and cut backs on civil services. Civil service cutbacks results in lost jobs. The economic downturn escalates. Buy local. Support your neighbors. Enrich your communities. Help pay for your local infrastructure by paying taxes on local purchases.
I know what unemployment does. The reasons you have outlined are why the recession is still around. But it was housing, not exports, that caused the thing in the first place.
I do not completely understand the idea behind by American. Why such an arbitrary geographic region? If buying domestic products is better than buying products from around the world, then it seems that buying only from one's state would be better. Perhaps one should stick only with goods produced in ones own city. Each city can be its own economic island, no imports or exports. Such a city would have the best economy in the world.
The reason most people cite is that it transfers some jobs from people in foreign countries to Americans, which makes sense if you think Americans are more deserving of prosperity than people in foreign countries (I don't). The economics backs you up, though- the more globalized an economy is, the more efficient it is, and everyone benefits. However, there is also the factor that a job in China is not equal to a job in America. The US has fairly worker-friendly labor laws, as compared to, say, Singapore or India, so things made in America are probably not going to be made by 10-year-old boys running 100-hour work weeks. So there is a legitimate reason to buy American (or other countries that are friendly to labor), but it isn't the one people usually cite.
