It seems that plastic bag manufacturers, their profits threatened, are on the offensive. Their strategy seems to be to limit the discussion to paper vs. plastic, rather than reusables vs. disposables, and to declare that Americans are somehow a breed apart: what works in Europe and elsewhere is somehow not possible here. They promote in-store recycling bins (despite a less than 5% return rate where that has been tried) and claim that plastic is so valuable, recyclers would love to get their hands on it to turn it into new bags or (more likely) plastic lumber for decks and park benches. (I wrote here about the problem with this approach.)
Since lobbyists like the PBA are complicating the issue, I came up with some drawings that I think help clear things up.
Well first, here is the universal recycling symbol. See how it is a closed loop? In this zero-waste model, all materials are recovered; nothing has to be mined, extracted, or later landfilled.
This is my illustration of the PBA type plan. Because the plastic lumber isn't recyclable, it is really just a pit stop in the journey from non-renewable natural resource to landfill.
In reality, most bags would never even be down-cycled into lumber. More than 95% are and will probably continue to be used once and thrown away. (Using it as a trash bag or poop scooper counts as throwing it away, not recycling.)
This is a reusable bag made out of a natural fiber, like cotton or hemp. When it eventually wears out after hundreds of uses, it can be composted, safely buried in your back yard, or recycled into paper. In the waste management hierarchy, this is called source reduction: it prevents a category of trash from being produced in the first place, thereby eliminating the need to manage it at all.
To see a much cooler set of graphics about why we can't continue to consume in a linear way on a finite planet, be sure to watch The Story of Stuff video. See also this excellent article from Salon.com, Plastic Bags are Killing Us.