Quote from: mdgiles on April 10, 2012, 07:14:21 AM
Actually I did. I took your post as a straight forward call for reducing our trade deficit. A rereading reveals that it's mostly a call for a tariff system of a sort, as a means of passing the costs of federal intervention on to the consumers.

MD Giles, all of the proposal's expenses are at the expense of U.S. purchasers only to the extent that they purchase foreign goods.

Wage earning families benefit from cheaper imported goods but every day of every year they're dependent upon their U.S. wages.  Regardless of how small the additions to imports' prices due to Import Certificates, (unlike tariffs) USA's assessed imports could never exceed that of our exports.  USA consumers will be able to purchase cheap, (but not the absolute cheapest) imported goods.  We cannot afford the absolute cheapest.
 
Refer to: www.USA-Trade-Deficit.Blogspot.com
or Google: "wikipedia, import certificates ".

Respectfully, Supposn

Quote from: west2004 on April 10, 2012, 04:38:08 AM
..........................Trade deficits and surpluses have little bearing on GDP.  Regardless of where items are purchased from, the most efficient application of capital and spending is what creates and grows the most wealth.  Growing wealth increases investment, and leads to more capital being spent and greater business growth and therefore greater GDP.........
.................This assumes that greater imports of goods is making American's less employed/employable.  More efficient use of capital in purchases allows greater investment return and in turn wealth growth and therefore more investment in production and employment of all kinds (because there is more wealth to invest).  So employment grows, and does so without the inflationary effect of a tariff.  In terms of real wages and real wealth, the nation and all individuals are better off.

West2004, we assume every entrepreneur or enterprise choosing to enter into a trade agreement perceived some comparative advantage to themselves: in aggregate they are correct.

It is also true that generally what our nation's enterprises perceive to be in their best interests are also generally in our economies better interest.  But there are often issues where enterprises general perceptions are wrong and/or where the best interests of the business communities and the remaining segments of our society diverge.

Trade surpluses contribute to nations' GDPs; trade deficits contribute absolutely nothing to their nations' GDPs.
A domestic product upon its producer's shipping platform or a similar imported product unloaded onto a dock within the nation, are of equal future benefit to the nation.  Prior to that, all benefits due from production are earned by the producing nation.

All supporting and direct goods and service products, (particularly labor) that contributed to the creation of the finished product contributed the GDPs of the producing nations.

Underemployment is socially and economically detrimental to a nation.  (Unemployment is only the extreme case of underemployment).  Enterprises can rent their labor for their needful periods.  Governments, particularly governments of democratic nations cannot endure if they attempt to store the nation's underemployed labor similar to shelved stock-in-trade.
USA consumers will be able to purchase cheap, (but not the absolute cheapest) imported goods.  We cannot afford the absolute cheapest.

Annual trade deficits are not to the nation's comparative advantage.
Refer to: www.USA-Trade-Deficit.Blogspot.com
or Google: "wikipedia, import certificates ".

Respectfully, Supposn

Quote from: Supposn on April 10, 2012, 12:02:27 PM
MD Giles, all of the proposal's expenses are at the expense of U.S. purchasers only to the extent that they purchase foreign goods.

Wage earning families benefit from cheaper imported goods but every day of every year they're dependent upon their U.S. wages.  Regardless of how small the additions to imports' prices due to Import Certificates, (unlike tariffs) USA's assessed imports could never exceed that of our exports.  USA consumers will be able to purchase cheap, (but not the absolute cheapest) imported goods.  We cannot afford the absolute cheapest.
 
Refer to: www.USA-Trade-Deficit.Blogspot.com
or Google: "wikipedia, import certificates ".

Respectfully, Supposn

And a tariff by any other name is what exactly? What you're suggesting is autarky; a policy of national self-sufficiency and nonreliance on imports. That might have worked before the era of international trade; but economic isolationism, is going to work very well these days. Not to mention that if other countries follow suit, how exactly is that supposed to help our economy? And of course their are firms whose business is strictly importing, just as their are firms that are strictly exporters; so how will that work - besides adding another layer of government bureaucracy. 

Quote from: Supposn on April 10, 2012, 12:14:30 PM
But there are often issues where enterprises general perceptions are wrong and/or where the best interests of the business communities and the remaining segments of our society diverge.

Trade surpluses contribute to nations' GDPs; trade deficits contribute absolutely nothing to their nations' GDPs.

GDP is nothing more than one measure, out of almost countless measures, of certain aspects of our economy.  It is not the be all end all single factor in determining health and quality of an economy.

QuoteA domestic product upon its producer's shipping platform or a similar imported product unloaded onto a dock within the nation, are of equal future benefit to the nation.  Prior to that, all benefits due from production are earned by the producing nation.

In the sense that you are describing, nations are not buying, selling, producing, or consuming these products.  Individuals are.  Individuals best serve their interests and those of the economy by applying their capital (whether it is labor, money, iron, etc) as efficiently as possible.

Since it is easy, let's use dollars as a measure of capital expenditure.  Say a business has budgeted 50,000 dollars for the purchase of paper to produce a publication, and the option is to import the paper at a cost of $5 per copy of their book, or produce it themselves, locally, at a cost of $10 per copy of the book.  Books of that type are selling at a price of $15 dollars, and for simplicity, the paper is the only cost.  With the $5 paper, they can produce 10,000 copies, with a margin of $10 per copy.  With the $10 paper, they can produce 5000 copies with a margin of $5 per copy.  That is a differences in return of $25,000 vs. $100,000.  That money can now be reinvested in more production.

This is an extreme and simplistic example, but I set it up to illustrate the aspect that you are missing, and that is the economic benefit gained by efficient allocation of invested capital.

Tariffs, by nature, lessen that efficiency and in turn lessen growth.

QuoteAll supporting and direct goods and service products, (particularly labor) that contributed to the creation of the finished product contributed the GDPs of the producing nations.

In my example, the capital that would have been applied to these tasks (less efficiently), can now be applied elsewhere in the economy.

QuoteUnderemployment is socially and economically detrimental to a nation.  (Unemployment is only the extreme case of underemployment).  Enterprises can rent their labor for their needful periods.  Governments, particularly governments of democratic nations cannot endure if they attempt to store the nation's underemployed labor similar to shelved stock-in-trade.

Unemployment and underemployment are brought on by growth stifling government intervention and and government created business cycles.

A tariff would exacerbate the problem, while bringing down real wages of those who are able to remain employed.

QuoteWe cannot afford the absolute cheapest.

If maximum growth and economic expansion are the goal, we cannot afford anything but the most efficient application of capital.

Quote from: Supposn on April 10, 2012, 12:02:27 PM
MD Giles, all of the proposal's expenses are at the expense of U.S. purchasers only to the extent that they purchase foreign goods.

Wage earning families benefit from cheaper imported goods but every day of every year they're dependent upon their U.S. wages.  Regardless of how small the additions to imports' prices due to Import Certificates, (unlike tariffs) USA's assessed imports could never exceed that of our exports.  USA consumers will be able to purchase cheap, (but not the absolute cheapest) imported goods.  We cannot afford the absolute cheapest.
 
Refer to: www.USA-Trade-Deficit.Blogspot.com
or Google: "wikipedia, import certificates ".

Respectfully, Supposn

Do you have a clue as to what percentage of goods are imported?
Even car manufacturers import much of the finished product.
Are you actually saying we need another branch of the Gov to monitor what parts need your tax placed upon them, do you have any idea what your end plan would cost, considering all the gov employees that would need to be hired?

In order to balance the budget in your ten year time span through taxation, it would cost the end consumer trillions yearly, fuel alone would double in price.

Dorgan and Feingold both said: (Both huge libs by the way)
"For oil, the phase-in period would be 10 years, to give the economy time to find and develop alternative energy supplies, the senators said."

Hussein tried the alternative BS and it was a complete failure.
The end result of this plan would bankrupt the average consumer, and only make the rich richer, trading and selling import certificates.

I appreciate your passion for reducing the debt, but the only way to actually reduce it is to quit spending like a drunken sailor and live within our means.

Quote from: west2004 on April 10, 2012, 12:02:04 PM
OK, but why apply tariffs in order to lower the trade deficit and lower its impact on GDP to get them to some nominally important point, at the expense of economic growth and expansion?  The ends do not justify the means, and the stated means are nowhere near the most efficient means to the desired end.

But those transfers of wealth, through their efficiency, grow/create wealth.  This new wealth becomes investment and economic expansion.  One must not look at everything as a simple transaction that occurs and then is done and measured.  One must observe the ongoing effects of a transaction, as well as the effects that meddling in those transactions will cause time passes and over a countless number of transactions..................

West2004, trade surpluses contribute to nations' GDPs; trade deficits contribute absolutely nothing to their nations' GDPs.
A domestic product upon its producer's shipping platform or a similar imported product unloaded onto a dock within the nation, are of equal future benefit to the nation.  Prior to that, all benefits due from production are earned by the producing nation.

The benefits of production are entirely earned by the net producing, not the importing nations.  A trade deficit is of no comparative advantage to the nation.  What portion of reply #13 are you refuting and specifically upon what basis?

Refer to: www.USA-Trade-Deficit.Blogspot.com
or Google: "wikipedia, import certificates ".
Respectfully, Supposn

Quote from: mdgiles on April 10, 2012, 12:45:19 PM
And a tariff by any other name is what exactly? What you're suggesting is autarky; a policy of national self-sufficiency and nonreliance on imports. That might have worked before the era of international trade; but economic isolationism, is going to work very well these days. Not to mention that if other countries follow suit, how exactly is that supposed to help our economy? And of course their are firms whose business is strictly importing, just as their are firms that are strictly exporters; so how will that work - besides adding another layer of government bureaucracy.

Okay. Make that "isn't going to work very well..." and "there are firms whose..".

We've had over a half century of the Government meddling in the supposedly Free Market to an ever increasing extent - how is that working out, economically speaking?

Government is not the solution, Government is the problem!

-Dr Watt

Quote from: Supposn on April 10, 2012, 05:56:16 PM
West2004, trade surpluses contribute to nations' GDPs; trade deficits contribute absolutely nothing to their nations' GDPs.
A domestic product upon its producer's shipping platform or a similar imported product unloaded onto a dock within the nation, are of equal future benefit to the nation.  Prior to that, all benefits due from production are earned by the producing nation.

The benefits of production are entirely earned by the net producing, not the importing nations.  A trade deficit is of no comparative advantage to the nation.  What portion of reply #13 are you refuting and specifically upon what basis?

Refer to: www.USA-Trade-Deficit.Blogspot.com
or Google: "wikipedia, import certificates ".
Respectfully, Supposn

I am refuting your entire platform that trade deficits or surpluses have any impact on GDP.  GDP is a measure of production, not consumption.  If a nation produces 15 trillion dollars worth of goods and services, their GDP is 15 trillion, regardless of whether it consumes 20 trillion or 10 trillion.  I am also refuting the importance you place on GDP in measuring the health and strength of the economy.

I am also refuting your proposed action to "correct" the trade deficit.  It will stifle growth.  It will make investment less efficient, thus leading to less return, less growth, less investment, etc.  It will decrease purchasing power and real wages of American's.

Reply 13 is rather incoherent and not relevant.  Can you restate it more clearly?

Quote from: west2004 on April 10, 2012, 07:20:09 PM
I am refuting your entire platform that trade deficits or surpluses have any impact on GDP.  GDP is a measure of production, not consumption.  If a nation produces 15 trillion dollars worth of goods and services, their GDP is 15 trillion, regardless of whether it consumes 20 trillion or 10 trillion.  I am also refuting the importance you place on GDP in measuring the health and strength of the economy.

I am also refuting your proposed action to "correct" the trade deficit.  It will stifle growth.  It will make investment less efficient, thus leading to less return, less growth, less investment, etc.  It will decrease purchasing power and real wages of American's.

quote author=west2004
Reply 13 is rather incoherent and not relevant.  Can you restate it more clearly?/quote]

West2004, nation's balance of trade is explicitly integral to the most common formula, (i.e. the expenditure formula) for calculating GDPs.  Balance of trade is indirectly or directly integral to ALL conventional GDP calculating formulas. Those domestic jobs, knowledge and experience that directly or indirectly enabled the nation's production all contributed to their nation's GDP.  These are the benefits earned by producing nations and denied at least to the extent that a nation is a net importer.

National balance of trade is of no concern to enterprises that can simply reduce their excess labor force if they determine importing rather than producing is to their comparative advantage.
What's to individual or aggregate enterprises advantage may diverge from the remainder of the nation that are not principle parties of trade agreements. 

Government can recognize and prohibit practices that are contrary to publics' interests.  Trade deficits are not to their nations' comparative advantages; they contribute absolutely nothing to their nation's GDP.

[There's precedents for this.  We have zoning and building regulations that protect those not directly party to determination of construction, use or location of a building].

Refer to: www.USA-Trade-Deficit.Blogspot.com
or Google: "wikipedia, import certificates ".
Respectfully, Supposn

Supposn, is there a reason you are avoiding answering my questions?

A number of years ago I came across an Information Please listing U.S. annual imports and export amounts for categories of goods.  I began considering their individual balances of trade and found some surprises.

I excluded what all tsaxpayers' are supporting; U.S. price supported crops. (We pay for increased domestic prices and additionally subsidize those crops exports.  I learned at that time U.S. agriculture was not the shining example of a trade surplus that's contrary to manufacturing's trade deficit.  I'm a proponent of a policy that does not treat agricultural products differently.

I would hope that since this proposal also behaves as an export subsidy, the Department of Agriculture would see fit to reduce their export subsidy to the extent that there's no need to further increase our subsidy of price supported crop exports.  This would be a reduction of federal spending.  The proposal's subsidy is funded from U.S. purchasers of foreign goods.

After I excluded our currently price supported agricultural goods, all petroleum products, and all products that are essentially scarce or precious minerals, we were then running a half trillion dollar annual trade deficit of all remaining goods.

I've often read that net trade balance's affect upon the GDP is anywhere from double to triple the nation's net trade balance.  I personally suspect they're including the affect of the goods upon the GDP AFTER the goods have reached domestic producers' shipping platform or imported goods have been unloaded upon the dock in the nation's port of entry.
Beyond those points in time, similar domestic and imported goods are of equal benefit to the nation.  It's nonsense to discuss differences beyond those points in time.

All of this proposal's expenses are borne by U.S. purchasers of foreign goods.  Almost trade deficit's entire economic detriment to the GDP and median wage are borne by U.S. wage and salary earning families who are completely or almost completely dependent upon their U.S. incomes.  The remaining detriment is to the federal debt we're passing on to our future generations.

Annually increasing our GDP by a minimum of a half trillion dollars each year with no net government expense is sufficient reason to adopt this trade proposal.

This is a market (rather than a government) driven policy.  Government is granted no policy discretion.  Assessment of goods is a technical rather than a policy determination.  Because it behaves as an export subsidy, it will increase the sum of USA's aggregate imports plus exports.

Refer to: www.USA-Trade-Deficit.Blogspot.com
or Google: "wikipedia, import certificates ".
Respectfully, Supposn

Quote from: Solar on April 10, 2012, 02:10:00 PM
Do you have a clue as to what percentage of goods are imported?
Even car manufacturers import much of the finished product.
Are you actually saying we need another branch of the Gov to monitor what parts need your tax placed upon them, do you have any idea what your end plan would cost, considering all the gov employees that would need to be hired?

In order to balance the budget in your ten year time span through taxation, it would cost the end consumer trillions yearly, fuel alone would double in price.

Dorgan and Feingold both said: (Both huge libs by the way)
"For oil, the phase-in period would be 10 years, to give the economy time to find and develop alternative energy supplies, the senators said."

Hussein tried the alternative BS and it was a complete failure.
The end result of this plan would bankrupt the average consumer, and only make the rich richer, trading and selling import certificates.

I appreciate your passion for reducing the debt, but the only way to actually reduce it is to quit spending like a drunken sailor and live within our means.

Solar, USA manufacturers will have to get on the internet, or call their broker to purchase Import Certificates, (ICs) with face values sufficient to cover the adjusted assessed values of whatever components or materials they want to import into the USA.
There will be a list of scarce or precious materials whose values are excluded from the assessed valuation of goods.  Exporters of U.S. goods can choose to have their goods assessed if they agree to pay the fees that defray all direct federal expenses due to this proposal.  They'll receive their ICs as soon as their goods leave the USA.

U.S Customs would be the logical organization to perform the assessment of goods.  They are currently responsible for being aware of everything entering the USA but they are failing to do so.  Now they'll have an additional inducement and revenue to do their job.  There will also be lobbyists representing U.S. producers to push for full and proper compliance.
[If you consider importing and exporting as a single global trade industry, any U.S. enterprise that competes or aspires to compete with foreign goods within or beyond USA's borders would benefit from this trade proposal].

Exporters' entitlements to pay the fees and acquire ICs are an indirect but effective subsidy of U.S. exports. I would expect that this proposal would increase our sum of aggregate imports plus exports.  That would increase the need for more U.S customs officers which eventually are all funded by U.S. purchasers of foreign goods.

The version of an Import Certificate policy I advocate would have an explicit list scarce or precious minerals.  If those minerals are integral to a product being assessed, the values of those minerals are excluded from the product's assessed value.  I expect petroleum to be one of those rare or scarce minerals on that list.  Your comment regarding ten years and fuel is inapplicable.

What's this comment about debt?  The federal debt?  This proposal will reduce the trade deficit which has a direct affect upon GDP which has some affect upon the federal budget and the federal debt.

Refer to: www.USA-Trade-Deficit.Blogspot.com
or Google: "wikipedia, import certificates ".
Respectfully, Supposn

Quote from: west2004 on April 10, 2012, 01:56:59 PM
..........................In the sense that you are describing, nations are not buying, selling, producing, or consuming these products.  Individuals are.  Individuals best serve their interests and those of the economy by applying their capital (whether it is labor, money, iron, etc) as efficiently as possible.

Since it is easy, let's use dollars as a measure of capital expenditure.  Say a business has budgeted 50,000.............................

West2004, we agree as I described in reply #16, transactions are carried out by individual customers, entrepreneurs, enterprises and their managements.  People not nation negotiate and decide.  I also explained and I think you may agree that although individuals and enterprises do what they believe is their comparative advantage, (and they are generally correct), what's to the advantage of the commerce may not always be to the advantage of the entire nation.

Sometimes they diverge.  We often rationalize what's to our best advantage is also to the advantage of our nation.  It's not unusual to rationalize that what to our advantage is to the nation's absolutely best advantage.

It is for that reason that an example of what's to an individual commercial enterprise's advantage is not my prime concern.  My concern is the nation's comparative advantage.

Regarding comparative advantage, one of this proposal's characteristics is complete free and competitive enterprise.  Under an Import Certificate policy, individual enterprises would be of no less competitive advantage than what we now experience by seeking absolute free trade.  Because the policy will significantly decrease our trade deficit which increases our GDP and bolsters our median wage.  Our entire nation' economy is improved for all of us.

Refer to: www.USA-Trade-Deficit.Blogspot.com
or Google: "wikipedia, import certificates ".
Respectfully, Supposn

Quote from: Supposn on April 10, 2012, 08:58:13 PM
quote author=west2004
Reply 13 is rather incoherent and not relevant.  Can you restate it more clearly?/quote]

West2004, nation's balance of trade is explicitly integral to the most common formula, (i.e. the expenditure formula) for calculating GDPs.  Balance of trade is indirectly or directly integral to ALL conventional GDP calculating formulas. Those domestic jobs, knowledge and experience that directly or indirectly enabled the nation's production all contributed to their nation's GDP.  These are the benefits earned by producing nations and denied at least to the extent that a nation is a net importer.

I would like to see the formula you speak about regarding GDP calculation.

Also, your understanding is ignoring the fact that a high level of imports (which tend to be cheaper, and therefore more efficient, or the import would not happen) allow more efficient application of capital and more ability to invest money in domestic production through cost savings and greater returns and faster growth, thus growing GDP as fast or faster through greater efficiency.

Your ideas ignore the possibility and likelihood that when money is saved importing goods that we cannot produce as efficiently we have more capital to apply domestically and the returns, and therefore growth rates, are much higher.

YOur theory assumes that consumption is static and production must necessarily drop to the extent that imports fulfill that consumption.  Neither is the case.

Quote
National balance of trade is of no concern to enterprises that can simply reduce their excess labor force if they determine importing rather than producing is to their comparative advantage.
What's to individual or aggregate enterprises advantage may diverge from the remainder of the nation that are not principle parties of trade agreements. 

I disagree with this.  Importing only occurs when it is most efficient.  It allows for capital to be applied more efficiently growing real wealth of all individuals and companies, and allowing greater investment in the things that American CAN do efficiently and leads to greater economic growth.  So the concerns of enterprises, mainly efficiency, are directly in line with those of the nation.

Quote
Government can recognize and prohibit practices that are contrary to publics' interests.  Trade deficits are not to their nations' comparative advantages; they contribute absolutely nothing to their nation's GDP.

GDP is a measure of production.  If, through a great deal of importing, a nations enterprises are able to be more efficient and invest more in production, it absolutely will impact GDP positively.

Quote[There's precedents for this.  We have zoning and building regulations that protect those not directly party to determination of construction, use or location of a building].

That's not really relevant.  Those are local ordinances, not a national economic policy that stifles growth.