Transferable Import Certificates Vs a Tariff policy

Discussion in 'Economy' started by Supposn, Dec 21, 2011.

  1. Supposn
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    Supposn Senior Member

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    Transferable Import Certificates Vs a Tariff policy.

    I’m a proponent of a trade policy based upon transferable Import Certificates, (ICs). (Refer to the discussion thread “Warren Buffett's concept to (significantly) reduce USA's trade deficit”,
    begun at 5:57PM, July 27, 2009).

    The IC policy proposal is often compared to tariff policies. Both policies would increase the prices paid by USA purchasers of imported goods. Both policies would not increase federal net spending or debt.

    Unlike tariff rates that are set by the government, IC’s open market global value is market driven. The federal assessment fees to defray government’s expenses due to the IC trade policy are a nominal portion of and effectively set only ICs minimum global open market value.

    The IC policy would absolutely eliminate the trade deficit of aggregate assessed values of goods subject to it REGARDLESS of imports’ additional prices’ to US purchasers; (i.e. even if prices for aggregate imported goods increased by only a penny per item, USA’s trade deficit of those goods aggregate assessed values would be eliminated).

    Elimination of aggregate assessed goods trade deficit subject to tariffs could only be assured if governments’ set tariff rates to the maximum global open market rate that ICs would possibly reach.

    ICs would be are less likely than free trade or tariffs to be subjected mischief contrary to USA’s economic interests. Such mischief is even perpetrated by our own government to our own economic disadvantage.
    I particularly recall the U.S. government negotiating away the interests of Louisiana rice farmers because the USA wanted to retain naval bases in Okinawa. Under the IC trade proposal, government has no such policy discretion and the matter would be nonnegotiable.

    The Marshall Plan’s expenses were paid for by all taxpayers. The expenses were not borne by particular industries or wage earners.

    Tariffs would be an additional source of federal revenue. IC’s are an additional revenue source for exporters of U.S. goods and would be an indirect but effective subsidy of USA exports.

    Respectfully, Supposn
     
  2. editec
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    editec Mr. Forgot-it-All

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    If it is a choice between this plan and nothing?

    I support it.

    But it will do next to nothing to reconsititute the industries that we have already lost.

    We can do better than this.
     
  3. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    Giving an industry a protective tariff is like giving a person welfare. It shields them from the rigors of life and competition rather than prepares them.

    Our industries would come back good and strong and in a sustainable way if we eliminated corporate taxes, unions, unemployment compensation, budget deficits, corporate heath care, and most regulations.
     
    Last edited: Dec 21, 2011
  4. expat_panama
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    expat_panama Silver Member

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    Wow, my Christmas stocking's packed with two huge blunders!

    The first is the goofy idea that state micromanagement of the economy with an "Import Certificate" system is somehow a 'market driven' plan. It isn't. People buying coffee from Colombia without first securing state approval is 'market driven'.

    The second is the goofy idea that we should want to "eliminate the trade deficit". Reality is that every time the trade deficit recedes--
    [​IMG]
    --we starve.
     
    Last edited: Dec 22, 2011
  5. editec
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    editec Mr. Forgot-it-All

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    Yeah that is true...now that we've eleminated so many different industries.

    NOW, what you're really showing us is the world economic downturn and that really has nothing whatever to do with tarriffs.

    Nice try thought
     
  6. expat_panama
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    expat_panama Silver Member

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    Ah you want us to believe that trade deficits don't accompany increasing GDP. You failed again with your 'Nice try thought' thing, what ever that is...
     
  7. Supposn
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    Supposn Senior Member

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    ExPat_Panama, it’s contended that trade deficits are ALWAYS detrimental to their nations’ GDPs.
    You correctly state it’s usual for USA’s trade deficits and GDPs the rise or fall simultaneously.
    These are not contradictions.

    Nations’ net global trade balances are only one of the factors determining GDP. Trade balances alone do not determine their nations’ annual GDP changes; but trade surpluses contribute and deficits ALWAYS are detrimental to their nations’ GDPs.

    Annual GDP and trade deficit are both statistical reports of what occurred within the same year. It’s logical that they should rise or fall almost simultaneously; they are both driven by the same economic forces at approximately the same time.

    Within less than robust economic durations, sales volumes within USA’s domestic markets’ similarly decrease; they decrease for both our domestic goods and our imports. Economists have said when the U.S. has a cold; the remainder of the world suffers pneumonia. During such periods our trade deficits decrease.

    Respectfully, Supposn
     
    Last edited: Dec 23, 2011

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