Reduce the trade deficit; increase GDP & median wage.

It is not our global trade but our trade deficits' that are a significant net detriment to our economy.  Trade deficits' are ALWAYS detrimental to their nations' GDPs.

I'm a proponent of a market driven proposal to significantly reduce USA's trade deficit of goods.  It does not favor or discriminate between foreign nations, or between manufactured, agricultural or any other industries' products. It is self funding; eventually all expenses are borne by U.S. purchasers of foreign goods.

The basic concept is for exporters who choose to pay the federal fees to acquire TRANSFERABLE IMPORT CERTIFICATES, (ICs) for the assessed value of their goods leaving the USA.  The fees defray all direct federal expenses due to this proposed policy.

Importers would be required to surrender ICs for the assessed value of their goods entering the USA. Surrendered certificates are cancelled.
These transferable Import Certificates may seem as a boon to exporters of USA goods but it's actually an indirect and effective export subsidy.

The version of this policy I advocate is completely market driven, funded by U.S. purchasers of foreign good and excludes values of specifically listed scarce or precious minerals integral to goods being assessed.

This trade policy would significantly decrease USA's trade deficit of goods and increase the aggregate sum of USA's imports plus exports and our GDP more than otherwise.  GDP bolsters the median wage.

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 total 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

Welcome to the forum Supposn.
If I follow you correctly here, what you're advocating for, is a tax on imports that would be paid by the consumer.
I agree, it would bolster American made products, but it would also hurt the working man, in that most are barely making it at the moment.

Though, I must admit, I like it better than a trade war.

By the way, Buffet's a fuckin socialist, he lives by the lib rule of, Do as I say, not as I do.
The more I thought about this, the more it sounded like just another lib ploy to do a back door tax on business, and when I saw you quoted Buffet, I knew it was.

This seems to basically be a form of tariff, and if so, is a terrible idea.

Trade deficits are somewhat meaningless, because all they measure is dollars out vs dollars in, and dollars are just another commodity, and one that is rapidly losing its value.

The fact is that trade, whether within our borders or outside, is an exchange of wealth.  this exchange only occurs when one is getting something they value more than what they are giving.  This means that any trade (whether it is dollars for steel, cows for gold, oil for yuan, etc) there is a positive sum of wealth gained.

Even if such a plan does raise wages for Americans, it will not raise their purchasing power, as the goods they buy will go up in price, thus leaving their purchasing power the same.  Those folks will enjoy their higher wages until they get to the grocery store or gas pump and have to pay far more for goods.

Quote from: west2004 on April 08, 2012, 05:38:39 PM
This seems to basically be a form of tariff, and if so, is a terrible idea.

Trade deficits are somewhat meaningless, because all they measure is dollars out vs dollars in, and dollars are just another commodity, and one that is rapidly losing its value.

The fact is that trade, whether within our borders or outside, is an exchange of wealth.  this exchange only occurs when one is getting something they value more than what they are giving.  This means that any trade (whether it is dollars for steel, cows for gold, oil for yuan, etc) there is a positive sum of wealth gained.

Even if such a plan does raise wages for Americans, it will not raise their purchasing power, as the goods they buy will go up in price, thus leaving their purchasing power the same.  Those folks will enjoy their higher wages until they get to the grocery store or gas pump and have to pay far more for goods.

Well said and I agree, its nothing but another tax, regardless of how they want to disguise it.
Like all fees/tariffs/duties/ they're all penalties/taxes, the consumer always ends up paying the bill.

Quote from: west2004 on April 08, 2012, 05:38:39 PM
This seems to basically be a form of tariff, and if so, is a terrible idea.

Trade deficits are somewhat meaningless, because all they measure is dollars out vs dollars in, and dollars are just another commodity, and one that is rapidly losing its value.

The fact is that trade, whether within our borders or outside, is an exchange of wealth.  this exchange only occurs when one is getting something they value more than what they are giving.  This means that any trade (whether it is dollars for steel, cows for gold, oil for yuan, etc) there is a positive sum of wealth gained.

Even if such a plan does raise wages for Americans, it will not raise their purchasing power, as the goods they buy will go up in price, thus leaving their purchasing power the same.  Those folks will enjoy their higher wages until they get to the grocery store or gas pump and have to pay far more for goods.

God, I love it when someone actually gets it!

It like opening all the windows on a warm spring morning in a house which has been closed up all winter long!

-Dr Watt

Much of our Trade Deficit is in reality the money we send overseas to purchase oil. Right now it is about half of our deficit. If Obozo allowed us to exploit our own oil resources, we would lower our deficit by ending imports and perhaps end it by becoming an oil exporter. Amazing how often, when you check back to the root of so many of our problems, you find Obamao's policies!

Quote from: west2004 on April 08, 2012, 05:38:39 PM
................Trade deficits are somewhat meaningless, because all they measure is dollars out vs dollars in, and dollars are just another commodity, and one that is rapidly losing its value................Even if such a plan does raise wages for Americans, it will not raise their purchasing power, as the goods they buy will go up in price, thus leaving their purchasing power the same.  Those folks will enjoy their higher wages until they get to the grocery store or gas pump and have to pay far more for goods.

West2004, trade deficits are nations' imports of goods and service products exceeding the values of their exports.  A trade deficit indicates the nation produced less than otherwise; (otherwise being if there had been no trade deficit).  Dollars are the chips that indicate who won or lost; at stake are jobs, the extent they're better paying jobs, and those lost jobs affect upon the median wage.

Trade deficits contribute absolutely nothing to nations' GDPs.  The benefits of production are earned entirely by the producing nations.
All expenses due to this proposal would be funded by the increased prices of foreign goods sold to U.S. purchasers.  That would be the entire increase of prices due to this proposal.

Wage earning families benefit from cheaper imports but they depend upon their U.S. wages every day of every year.   Cheaper imports do not compensate them for trade deficit's detriment to the GDP and median wage.  Within an Import Certificate policy there will be available cheap, but not the absolute cheapest priced imports.

Respectfully, Supposn

Quote from: mdgiles on April 09, 2012, 02:48:25 PM
Much of our Trade Deficit is in reality the money we send overseas to purchase oil. Right now it is about half of our deficit. If Obozo allowed us to exploit our own oil resources, we would lower our deficit by ending imports and perhaps end it by becoming an oil exporter. Amazing how often, when you check back to the root of so many of our problems, you find Obamao's policies!

MD Giles you missed this part of my message?
"The version of this policy I advocate is completely market driven, funded by U.S. purchasers of foreign good and excludes values of specifically listed scarce or precious minerals integral to goods being assessed".

Otherwise entrepreneurs would be exporting gem encrusted cast gold paper weights to acquire transferable Import Certificates in order to import more labor or technologically intensive goods.  Additionally there are risks to not excluding scarce minerals from the assessed values of goods.
These exclusions are "deal busters".

Our petroleum problem is a separate issue that requires its own solution.  Excluding the values of scarce or precious minerals, the remainder is half or more of USA's trade deficit of goods.  That's what this proposal would eliminate.

Due to its behavior as an export subsidy, it would increase the sum of our aggregate imports plus exports, the GDP and the median wage more than otherwise; otherwise being not enacting this proposal.

Respectfully, Supposn

Quote from: Supposn on April 10, 2012, 01:45:54 AM
West2004, trade deficits are nations' imports of goods and service products exceeding the values of their exports.  A trade deficit indicates the nation produced less than otherwise; (otherwise being if there had been no trade deficit).  Dollars are the chips that indicate who won or lost; at stake are jobs, the extent they're better paying jobs, and those lost jobs affect upon the median wage.

A trade deficit in products is not a trade deficit in wealth.  In every trade, wealth is created as an individual trading is getting something more valuable than they give up.  A growth in wealth is what grows purchasing power of individuals and businesses.  Individuals who buy imported products do so because it gives them a better return on trade, and thus allows them or their business to grow their wealth and be more efficient.  More efficiency leads to greater returns for businesses.  Greater returns lead to greater investment in businesses.  Greater investment means increased hiring (it might be hiring in different areas, as the market will be directing capital to the areas that are most efficient).

QuoteTrade deficits contribute absolutely nothing to nations' GDPs.  The benefits of production are earned entirely by the producing nations.
All expenses due to this proposal would be funded by the increased prices of foreign goods sold to U.S. purchasers.  That would be the entire increase of prices due to this proposal.

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.

An increase in prices on imports would have an inflationary effect, as the things everybody and every company buys.  This price growth would negate any growth in nominal wages, as purchasing power of every dollar is now lower. IT would stifle growth and force inefficient application of capital and spending.

QuoteWage earning families benefit from cheaper imports but they depend upon their U.S. wages every day of every year.   Cheaper imports do not compensate them for trade deficit's detriment to the GDP and median wage.  Within an Import Certificate policy there will be available cheap, but not the absolute cheapest priced imports.

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.

Quote from: Supposn on April 10, 2012, 02:43:24 AM
MD Giles you missed this part of my message?
"The version of this policy I advocate is completely market driven, funded by U.S. purchasers of foreign good and excludes values of specifically listed scarce or precious minerals integral to goods being assessed".

Otherwise entrepreneurs would be exporting gem encrusted cast gold paper weights to acquire transferable Import Certificates in order to import more labor or technologically intensive goods.  Additionally there are risks to not excluding scarce minerals from the assessed values of goods.
These exclusions are "deal busters".

Our petroleum problem is a separate issue that requires its own solution.  Excluding the values of scarce or precious minerals, the remainder is half or more of USA's trade deficit of goods.  That's what this proposal would eliminate.

Due to its behavior as an export subsidy, it would increase the sum of our aggregate imports plus exports, the GDP and the median wage more than otherwise; otherwise being not enacting this proposal.

Respectfully, Supposn

Basically what you are proposing is a carbon trading scam on imports.
Theres a reason it failed in the energy mkt and why it would fail as a deficit reduction scheme, its a tax born out of nothing.

You want to tax the producers and have them absorb the costs to pass along to the consumer.
How about instead of using the power of gov interference, we get it the Hell out of the way and let the free mkt decide the winners and losers.

Painting the deck chairs and raising their usage fees is not going to raise their value, nor will it increase their use.
What it will do, is eliminate a large portion of the mkt from lounging in them.

What you're proposing is a trickle up method, which has been proven to kill mkts.

Quote from: Supposn on April 10, 2012, 02:43:24 AM
MD Giles you missed this part of my message?
"The version of this policy I advocate is completely market driven, funded by U.S. purchasers of foreign good and excludes values of specifically listed scarce or precious minerals integral to goods being assessed".

Otherwise entrepreneurs would be exporting gem encrusted cast gold paper weights to acquire transferable Import Certificates in order to import more labor or technologically intensive goods.  Additionally there are risks to not excluding scarce minerals from the assessed values of goods.
These exclusions are "deal busters".

Our petroleum problem is a separate issue that requires its own solution.  Excluding the values of scarce or precious minerals, the remainder is half or more of USA's trade deficit of goods.  That's what this proposal would eliminate.

Due to its behavior as an export subsidy, it would increase the sum of our aggregate imports plus exports, the GDP and the median wage more than otherwise; otherwise being not enacting this proposal.

Respectfully, Supposn

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.

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.

Yep, a tax, is a tax, is a tax, no matter how you disguise it.

Quote from: west2004 on April 10, 2012, 04:38:08 AM
A trade deficit in products is not a trade deficit in wealth.  In every trade, wealth is created as an individual trading is getting something more valuable than they give up.  A growth in wealth is what grows purchasing power of individuals and businesses..................................

Wesdt2004, the expenditure formula is the simplest and most generally uses formula for calculating what's commonly defined as the gross domestic product, (GDP).  ALL commonly accepted formulas throughout statisticians' and economists' communities throughout the world arrive at similar GDP amounts.

Within ALL of those formulas trade surpluses positively contribute and trade deficits contribute absolutely nothing to their nations' GDPs.
This is not an opinion but a fact integral to the GDP and the calculating formulas that define the GDP.

"Investments" contribute but "transfers of wealth" do not contribute to GDPs.  Investments are the consumption or use of goods or service products on behalf of an enterprise to hopefully realize additionally valued goods and services. 

Foreign entrepreneurs in aggregate spent less than their sales revenues derived from their sales to USA customers, for the purchase of U.S. products.  That's our nation's global trade deficit.

Respectfully, Supposn

Quote from: Supposn on April 10, 2012, 11:45:45 AM
Wesdt2004, the expenditure formula is the simplest and most generally uses formula for calculating what's commonly defined as the gross domestic product, (GDP).  ALL commonly accepted formulas throughout statisticians' and economists' communities throughout the world arrive at similar GDP amounts.

Within ALL of those formulas trade surpluses positively contribute and trade deficits contribute absolutely nothing to their nations' GDPs.
This is not an opinion but a fact integral to the GDP and the calculating formulas that define the GDP.

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.

QuoteSome baptist hospital center in Texas switched it around and started paying doctors flat fees for full health outcomes, and paid bonuses ONLY IF they practiced the standard of care as defined by the hospital in each case.

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.

QuoteForeign entrepreneurs in aggregate spent less than their sales revenues derived from their sales to USA customers, for the purchase of U.S. products.  That's our nation's global trade deficit.

OK, explain what makes that inherently good or bad for either side.