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Reduce The Trade Deficit; Increase Gdp & Median Wage

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#1 Supposn



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Posted 13 April 2012 - 07:34 PM

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 proposal to reduce USA’s trade deficit of goods that was first introduced to the Senate in 2006. The market driven proposal 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. The 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 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

#2 phillip1882



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Posted 22 December 2012 - 03:24 PM

i realize it's a bit late to comment on this. apologies.
i both agree and disagree with this proposal.
let's say it costs 100 dollars to make something in the U.S. while it costs 75 to make it in china and ship it to the U.S.
clearly this will create a trade deficit. businessmen will shift their factories to china to make it at that lower cost.
but now let's say we implement the above IC proposal. so now you can only sell goods in America at the same cost it takes the U.S. to produce the same good. true it will decrease the trade deficit, but there is a fundamental problem. it also decreases our ability to trade with other nations.
let me demonstrate with a simple example.
there are two people on an island Jack and Jill, each capable of producing two goods: fish, and fire wood.
jack outstrips Jill's productive capacity in both; he's able to produce 5 fire wood a day or 3 fish a day; with Jill only able to produce 3 fire wood a day, or 2 fish a day. would they benefit form trade? absolutely. if Jack focuses on fire wood, and Jill focuses on fish, they'll have more of each than if they didn't trade. but now lat's say Jack feels cheated by the trade. after all, he can produce more fish than Jill can. he makes the rule that it costs Jill the same amount of fish for each fire wood that jack would produce if he focused on fish. the result? Jill gets less than 1 fish a day, and eventually starves!