Warren Buffett's concept to significantly reduce USA's trade deficit

Discussion in 'Economy' started by Supposn, Aug 30, 2009.

  1. Supposn
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    Supposn Senior Member

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    An economic stimulus at no expense. Warren Buffett’s proposal to significantly decrease USA’s trade deficit.
    I'm a proponent of Warren Buffett’s concept to significantly decrease USA’s trade deficit of goods. A senate bill based upon the concept was proposed in 2006 by Senators Dorgan and Feingold.
    Trade deficit's detriment to the gross domestic product, (GDP) exceeds the amount of the deficit itself. Anything detrimental to the GDP is generally detrimental to the median wage.

    As proposed to the U.S. Senate, goods leaving the USA would be assessed and transferable IMPORT certificates for their assessed value would be issued to the exporter.

    Importers would be required to surrender transferable IMPORT certificates for the assessed value of their goods entering the USA. Surrendered certificates are cancelled. This would significantly reduce our trade deficit and induce the sum of our imports plus exports to increase.

    GDP and median wage are the most indicative measures of current production and distribution of wealth. Due to significantly reducing our trade deficit of goods and supporting our exports, this proposal would increase USA's GDP and median wage. It would also encourage the aggregate sum of USA’s imports plus exports to increase. We can continue enjoying cheap, (but not the absolute cheapest) foreign goods.

    This is a permanent economic stimulus that doesn’t require federal disbursement or risk of trillions of dollars. I'm aware of no single economic proposal that could accomplish all this with less government intervention and less increased prices of imported goods.

    Although the initial 2006 bill draft would be of small expense, I’m among those that regret that draft was not, (as it should have been) completely self funding.

    The 2006 initial draft of the bill would not apply to petroleum goods for five years from the date of enactment. We regret that it did not (forever) exclude the values of specifically listed precious or scarce materials integral to goods being assessed. Enabling the export made in USA cast gold paperweights imbedded with precious gems in order to import electronic goods would undermine the bill’s purpose.

    Refer to: World Wide Web site “USA-Trade-Deficit,Blogspot.Com “.
    Respectfully, Supposn
     
  2. Supposn
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    Supposn Senior Member

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    Within another topic, Working Man asked “For what reason should a tariff such as this, (Israel tariff), be imposed on such a product by the Israeli government?

    Working Man, this wouldn’t occur if USA’s adopted trade practices for our own best interest rather than altruistically considering the interests of other nations to rake precedent over those of our own wage earners.

    Refer to www.USA-Trade-Deficit.Blogspot.Com

    Respectfully, Supposn
     
  3. sparky
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    sparky Senior Member

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    VAT would be nice.....~S~
     
  4. editec
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    editec Mr. Forgot-it-All

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    A VAT on imported good, you mean, Sparky?

    Sure why not?

    That's what happens to our exports when they arrive at most countries.
     
  5. Supposn
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    Supposn Senior Member

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    Sparky & Editec, I'm a proponent of replacing (to the most practical extent), income and payroll tax revenues with a sales tax revenue.

    Among all sales tax methods, Value Added Tax, (VAT) is the most amiable to commercial enterprises, least susceptible to tax evasion or other frauds, the least expensive to enforce and carries absolutely no hidden additional sales tax imbedded within any level of sales transactions.

    Businesses appreciate its lesser intervention to their cash flow. It provides them with the fasted refund of any sales taxes that the6y themselves have paid. Only the absolute ultimate non-commercial domestic consumers of goods and services would pay any VAT.

    The nature of all sales taxes is the ultimate consumers need keep any records or file any tax forms. They have absolutely no need for tax attorneys. Businesses and entrepreneurs have need for them only if they attempted to practice tax fraud.

    Respectfully, Supposn
     
  6. The Rabbi
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    The Rabbi Gold Member

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    Could you explain this scheme a little? You lost me somewhere in there.
     
  7. Supposn
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    Supposn Senior Member

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    Rabbi, my message links to www.USA-Trade-Deficit.Blogspot.Com
    (I notice a typo error in at least one of this link within my prior messages. No one considers links or they are so unimpressed with my message to introduce this concept?

    That linked site further provides the link, www.USA-Imports.Blogspot.Com
    I thought they’re written in a fairly straight forward manner. If you have any specific questions, thoughts or criticisms regarding this concept, I’d be pleased to discuss it with you.

    Respectfully, Supposn
     
  8. The Rabbi
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    The Rabbi Gold Member

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    I've read it and still don't understand it.
    It seems that importers will be required to buy import licenses from exporters. Obviously there will be more demand for import licenses than supply. Thus the price of a license will go up, increasing the cost of imported goods and decreasing the cost of exported goods. This is in effect a tariff on imports, but without the government getting any of the revenue. Such a tariff will drive up costs of goods to U.S. consumers.
    I honestly fail to see the virtue of this. So did Congress. And the proposal is at least 4 years old.
     
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  9. Supposn
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    Supposn Senior Member

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    Rabbi,
    You have read what? Did you read the second topic, “Warren Buffett’s concept to significantly decrease USA’s global trade deficit of goods”
    Within www.USA-Trade-Deficit.Blogspot.Com ?
    The first topic, “A nation’s trade deficit is always a net economic detriment” explains the need for such a trade policy. Each of the messages are less than a single page length.

    Excerpted from www.USA-Trade-Deficit.Blogspot.Com :
    “Exporters would be issued transferable IMPORT Certificates for that assessed value of their goods leaving the USA. Importers would be required to surrender IMPORT Certificates for the assessed value of their goods entering the USA. Surrendered certificates are cancelled.
    The 2006 draft did not reach a senate floor vote. Many of us regret the draft was not self-funding. We prefer that goods leaving the USA be assessed and certificates issued only for exporter that choose to pay fees covering all government expenses due to this trade act. The open market value of transferable import certificates would sufficiently motivate exporters”.

    Similar to tariffs, Buffett’s proposal would increase the prices of foreign goods to USA purchasers. Unlike tariffs, the extent of price increases would primarily be determined by the market rather than the government. Assessing the value of goods is a technical rather than s policy decision.

    Unlike tariffs, exporters’ additional revenue due to their use or sale of the transferable IMPORT certificates are in effect decreases their expenses for USA exported goods. This proposal would induce an increased sum of USA’s aggregate imports plus exports.

    Unlike tariffs, contra trade practices such as currency manipulation or inhibiting USA goods entering or being sold within foreign nations would self inflict almost immediate harm upon those nations. Because the value of USA’s imports could not exceed the adjusted assessed value of our exports, the foreign interests could inflict little harm upon us.

    [Presently we seek pure free trade. The conflicting goals within our government departments often inhibit USA exercising existing laws to guard our best interests. We would do better if USA negotiators had no discretion. USA negotiators would simply shrug and declare “this is our existing trade laws and it is beyond our power to negate them”].

    Each dollar of USA’s deficit of goods costs us three dollars of GDP. The GDP bolsters the median wage. USA consumers could still enjoy cheaper, (but not the absolute cheapest) prices for foreign goods. USA families purchase foreign goods but they are dependent their wages every day within every year.

    Respectfully, Supposn
     
  10. sparky
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    sparky Senior Member

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    perhaps this fits here Supposn............

    With 10 percent national unemployment, now more than ever, 52 percent of Americans believe that “free trade” is responsible for hurting job prospects nationwide. This is compared to just 13 percent who believe our policies encourage job growth. The remainder either had no opinion one way or the other or refused to answer.

    Perhaps the most telling detail of the survey is the huge gap between our economic and political elite and the rest of the population.

    The immensely influential Council on Foreign Relations (CFR) – made up of politicians, businessmen, and nearly every viable Presidential candidate – is almost uniformly in favor on “free trade” as a the primary approach for America in international commerce. Nearly 90 percent of CFR members believe that pursuing trade agreements like NAFTA and the WTO are a good way of building prosperity in the United States. This is more than double the proportion of average Americans who believe the same.



    The False Promises of Free Trade | Economy In Crisis

    ~S~
     

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