Obama wants to encourage manufacturing.

Discussion in 'Economy' started by Supposn, Feb 19, 2012.

  1. Supposn
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    Supposn Senior Member

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    Obama wants to encourage manufacturing?

    I’m awaiting specifics but President Obama seems to be alluding creating a new tax provisions for encouraging US. manufacturing and exporting of manufactured products.

    It would please me if our nation would achieve this but I suspect that the president has the wrong methods in mind.

    Trade deficits are ALWAYS (more than otherwise) detrimental to their nation’s gross domestic production, (GDP). Nation’s global trade’s affect upon their GDP is generally understated (and never overstated) If we significantly decrease our trade deficit of goods, we will also induce a significant increase our GDP. GDP bolsters the median wage.

    I’m personally in full agreement with the president’s apparently recognizing manufacturing as among the families of industries whose growth would be most advantageous to our nation. But I much prefer a proposal that does not favors any foreign nation, enterprise, industrial family or type of product; the Import Certificate trade policy is such a proposal.
    The proposal’s market rather than government driven. U.S. federal determinations of assessed values are technical rather than policy determinations.

    Refer to the topic “Warren Buffett's concept to significantly reduce USA's trade deficit”
    or to “www.USA-Trade-Deficit.Blogspot.com ”
    or Google wikipedia, import certificates

    Respectfully, Supposn
     
    Last edited: Feb 19, 2012
  2. Middleoftheroad
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    Middleoftheroad Active Member

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    There seems to be a concept that somehow manufactured goods somehow decrease the trade deficit while service "goods" do not. It is not true. Any kind of job in general will decrease the trade gap somewhat (people not working consume more then they produce).
    But the real value of anything is in what someone thinks it is worth. I guess it is intuition that something you can physically grab is real and has value, but who is to say that a flat panel TV is worth more then a maid? Maybe to you it is, but to a millionaire it might not be. Or that a computer is more valuable then the services of the IT guy who made it work, when you (not you specifically) could not?
     
  3. DSGE
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    DSGE VIP Member

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    That's not true. You still haven't managed to explain why you think that's true.
     
  4. Baruch Menachem
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    Baruch Menachem '

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    I am not in favor of the concept of raising taxes on everyone to give special considerations for favored businesses. If a business is a good idea, it will make a good profit. If it is not so good an idea, the taxpayer is robbed.

    What would be better would be to redue the budget deficit, which is financed by the trade deficit. You reduce the amount of government's irresponsible and out of control spending, the trade deficit will take care of itself. Borrowing money from China to give to crooked campaign contributors is not the way to fix the problem, but only going to compound it.
     
  5. DSGE
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    DSGE VIP Member

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    Ah, the trade deficit will not take care of itself. How do you figure it'll take care of itself? It's not even something to be taken care of.
     
  6. Supposn
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    Supposn Senior Member

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    Middle of the Road, I believe the USA had a trade surplus of services and a deficit of goods. I suppose we still have a trade surplus of services.

    The Import Certificate proposal is only applicable to tangible goods crossing our borders. A good portion of services are in the form of information or intellectual property. Such traffic is difficult to regulate. The era of prohibition should have taught us was the harm done by enacting ineffectual or otherwise less enforceable laws.

    Assessments are adjusted to exclude the value of specifically listed precious, semi-precious or scarce minerals integral to goods. The inclusion of such value would actually undermine this trade policy’s economic benefit.
    Services and specifically listed minerals exclusion from this trade policy do no additional harm to the nation or mitigates the benefits due to the remainder of this policy. I have no problem with acceptance of a half of a loaf when it doesn’t limit opportunities to acquire the other half.

    If the policy were applied to petroleum, the consequences would be of lesser benefit and much more likely to be of both net economic and political harm. The issues of fossil fuels should be addressed within other than this trade policy.

    Respectfully, Supposn
     
  7. Supposn
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    Supposn Senior Member

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    DSGE, the validity of my explanation is not dependent upon you or I.
    You don’t, I do accept it.

    Refer to the topic “Trade deficits are ALWAYS detrimental to their nations’ GDPs”
    posted @ 10:25 AM, November 30, 2011.

    Respectfully, Supposn
     
  8. Supposn
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    Supposn Senior Member

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    Baruch Menachem, although this proposal may seem to be a boon to exporters of USA products, it is indirectly but very effectively a U.S. export subsidy ultimately and entirely funded by U.S. purchasers of foreign goods.

    If you as I do accept the concept of competitive free enterprise, then you accept the concept the scenario that competing exporters of USA products and negotiations initiated by foreign purchasers of USA products will all conspire to reduce prices of U.S. exported products. Thus U.S. products can better compete with foreign producers’ lower wages.

    U.S. purchasers of foreign goods drive our trade deficit of goods. It is reasonable that to the extent they’re the cause of our goods’ trade deficit, they should pay the cost of its mitigation.

    Respectfully, Supposn
     
  9. Supposn
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    Supposn Senior Member

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    Baruch Menachem, reducing our federal budget deficit would of course be of great benefit to our economy.

    The import Certificate program is funded entirely by U.S. purchasers of foreign goods. It diverts nothing from any other program to improve our nation. It does nothing that would hinder congressional efforts to balance the budget.

    I disagree (if you’re contending) to the extent we reduce our budget deficit, it will similarly reduce our trade deficit.

    Regardless of how well nations’ economy may be doing, ALWAYS their trade surpluses’ increase or their trade deficits decrease their GDPs more than otherwise.

    Balance of trade is not an item within the federal budget.

    Respectfully, Supposn
     
    Last edited: Feb 19, 2012
  10. California Girl
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    California Girl BANNED

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    It's taken him 3 years to work this out? No wonder this country's in a mess.
     

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