USA goods could be competitively priced

[Supposn]

adoption of the trade policy described in Wikipedia’s article entitled “Import Certificates” would increase USA's GDP and numbers of jobs.

If you increase GDP and jobs but reduce our standard of living, is that a good thing?

Toddsterpatriot, I agree that increasing numbers of jobs while reducing wages purchasing powers is contra productive. That's why the federal minimum wage is economically and socially beneficial. If it were pegged to the purchasing power of the U.S. dollar, it would be more beneficial.

Why would you believe that increasing USA's annual GDPs and our numbers of jobs would undermine USA's standards of living?

Respectfully, Supposn

 

[Toddsterpatriot]

adoption of the trade policy described in Wikipedia’s article entitled “Import Certificates” would increase USA's GDP and numbers of jobs.

If you increase GDP and jobs but reduce our standard of living, is that a good thing?

Toddsterpatriot, I agree that increasing numbers of jobs while reducing wages purchasing powers is contra productive. That's why the federal minimum wage is economically and socially beneficial. If it were pegged to the purchasing power of the U.S. dollar, it would be more beneficial.

Why would you believe that increasing USA's annual GDPs and our numbers of jobs would undermine USA's standards of living?

Respectfully, Supposn

Toddsterpatriot, I agree that increasing numbers of jobs while reducing wages purchasing powers is contra productive.

Excellent!

That's why the federal minimum wage is economically and socially beneficial.

Minimum wage is a disaster. All it does is price low skilled and unskilled workers out of the job market.
Just look what it did to employment of blacks.

Why would you believe that increasing USA's annual GDPs and our numbers of jobs would undermine USA's standards of living?

Don't think I could prove it would, but I can think of plenty of ways it could.

Say we stop importing backhoes and instead use domestically produced shovels.
We just reduced imports and increased GDP by making more shovels. Double benefit.
We've also made the construction workers less productive, but at least we'll need to hire more
of them, so another bonus, more jobs.

Have we increased our standard of living?

 

[Supposn]

I read the article on Wikipedia, though I admit I only understand it at face value. I have a few questions perhaps you could answer based on your understanding of IC's. ...Next question:
If we reduce the number of US dollars flowing out of the US and we fail to achieve export targets, we'll simultaneously decrease the demand for US treasuries abroad (as lower imports mean there are fewer US dollars in the world markets) which could in turn mean that the US government is incapable of rolling over its debt. The only way to pay for the debt at that point would be to run a national surplus (taxes exceed revenues).

Next question: How do you think this would affect employment? ...

What reduction of US dollars flowing out of the US are you discussing? What export export targets are you referring to?

If there are fewer fewer US dollars in the world markets, USA has lesser federal deficits. You consider lesser USA debt as detrimental to USA's economy? You believe that it would increase the cost of federal debt servicing? Our federal budget is currently based upon deficit financing. You consider that increasing our GDP and numbers of jobs will exacerbate our annual federal budgets?

Adoption of the Import Certificate policy would increase our GDP and number of jobs more than otherwise. I would suppose that would be an increase of national employment?

I provide reasons for my contentions but you don't state what logical reasoning leads you to doubt their credibility?

Respectfully, Supposn

 

[Supposn]

There's something wrong with US Message Board's software?
Someone anonymously posted:

”You really didn't answer all of my questions.
Would IC's (in theory) reduce foreign imports into the US?
If so, Why? What is the benefit?”

Anonymous poster, annual trade deficits are always to some extent detrimental to their nation's GDPs and numbers of jobs. USA's adoption of the policy described in Wikipedia’s article entitled “Import Certificates” would very significantly reduce our nation's chronic annual trade deficit of goods.

The policy is of no value to a nation that does not experience annual trade deficits of goods. It may not entirely eliminate its nation's trade deficit of goods because It's not applicable to the value of specifically listed scarce or precious mineral materials integral to goods and thus may not entirely eliminate its nation's trade deficit of goods.

The system's substantially market driven; volumes and proportional “mixes” of imports and exports are determined by markets. Regardless of that determination, the system will always provide its nation's with annual GDP and numbers of jobs greater than otherwise.

Which of your questions did I not address? What fault did you find with the concept of Import Certificates?

Respectfully, Supposn

 

[Econ4Every1]

There's something wrong with US Message Board's software?
Someone anonymously posted:

How is this "anonymous"?

Unless you saw something different?

...Annual trade deficits are always to some extent detrimental to their nation's GDPs and numbers of jobs.

You keep asserting this yet you still haven't explained why.

Why do you believe trade deficits are a detriment?

 

[Supposn]

Toddsterpatriot, I agree that increasing numbers of jobs while reducing wages purchasing powers is contra productive. That's why the federal minimum wage is economically and socially beneficial. If it were pegged to the purchasing power of the U.S. dollar, it would be more beneficial.

Why would you believe that increasing USA's annual GDPs and our numbers of jobs would undermine USA's standards of living?

Respectfully, Supposn

... Don't think I could prove it would, but I can think of plenty of ways it could.

Say we stop importing backhoes and instead use domestically produced shovels.
We just reduced imports and increased GDP by making more shovels. Double benefit.
We've also made the construction workers less productive, but at least we'll need to hire more
of them, so another bonus, more jobs.

Have we increased our standard of living?

nice try but sorry, no cigar.

The trade policy described in Wikipedia’s article entitled “Import Certificates” is substantially market rather than government driven. Within an Import Certificate nation, purchasers would be expected to purchase domestic shovels rather than imported backhoes, only if it were more financially advantageous for them to do so.

Within an Import Certificate environment, If there's effective USA demand for any foreign item, that item will inevitably be imported into our nation, (if it's otherwise legal to do so).

Respectfully, Supposn

 

[Toddsterpatriot]

Toddsterpatriot, I agree that increasing numbers of jobs while reducing wages purchasing powers is contra productive. That's why the federal minimum wage is economically and socially beneficial. If it were pegged to the purchasing power of the U.S. dollar, it would be more beneficial.

Why would you believe that increasing USA's annual GDPs and our numbers of jobs would undermine USA's standards of living?

Respectfully, Supposn

... Don't think I could prove it would, but I can think of plenty of ways it could.

Say we stop importing backhoes and instead use domestically produced shovels.
We just reduced imports and increased GDP by making more shovels. Double benefit.
We've also made the construction workers less productive, but at least we'll need to hire more
of them, so another bonus, more jobs.

Have we increased our standard of living?

nice try but sorry, no cigar.

The trade policy described in Wikipedia’s article entitled “Import Certificates” is substantially market rather than government driven. Within an Import Certificate nation, purchasers would be expected to purchase domestic shovels rather than imported backhoes, only if it were more financially advantageous for them to do so.

Within an Import Certificate environment, If there's effective USA demand for any foreign item, that item will inevitably be imported into our nation, (if it's otherwise legal to do so).

Respectfully, Supposn

Within an Import Certificate nation, purchasers would be expected to purchase domestic shovels rather than imported backhoes, only if it were more financially advantageous for them to do so.

You just made imported backhoes more expensive. This was the result.
Smaller trade deficit. More local production. Is your result better for the country?

Within an Import Certificate environment, If there's effective USA demand for any foreign item, that item will inevitably be imported into our nation

How is "effective demand" different than the demand we have now?

 

[Supposn]

...Annual trade deficits are always to some extent detrimental to their nation's GDPs and numbers of jobs.

You keep asserting this yet you still haven't explained why.
Why do you believe trade deficits are a detriment?

Econ4Every1, production facilities are not only factories; ranches, farms, artist studios, laboratories, mines, and fishing vessels are also production facilities
Enterprises' Production facilities outside of the USA do not generally provide jobs for USA employees, or purchase goods and services from USA production supporting enterprises. They do not generally pay USA federal, or state, or local taxes based upon facilities beyond USA's jurisdiction or upon the operations of those facilities

Production facilities are generally supported by other production supporting enterprises' goods and service products and those supporting enterprises are generally within the same nation as the producers they support.

Our nation loses all of this when the production of goods moves beyond our borders.

After a USA product reaches its producer's shipping platform, or after foreign goods have reached the point where they're within USA jurisdiction, handled and attended to by USA labor, there's no economic difference between similar domestic or foreign goods; the economic differences between similar domestic and foreign goods occur entirely within their production stages.
Nations' trade balances are an explicitly stated component within the calculation their nation's gross domestic product. They contribute to trade surplus nations' GDPs and reduce trade deficit nations' GDPs.

Furthermore, although all of the nation's production costs contribute to their GDP's, costs due to production support that are not reflected within the prices of globally traded goods are not attributed to foreign trade. To those extents, nation's balances of trade are understated.
Why would you doubt nation's trade balances effects upon their nation's GDPs or GDPs relationship to numbers of jobs?

Respectfully, Supposn

 

[Supposn]

...Unless you saw something different?

Yes, post #83 appeared with Supposn as the poster.

…Anonymous poster, annual trade deficits are always to some extent detrimental to their nation's GDPs and numbers of jobs. USA's adoption of the policy described in Wikipedia’s article entitled “Import Certificates” would very significantly reduce our nation's chronic annual trade deficit of goods. …
… The system's substantially market driven; volumes and proportional “mixes” of imports and exports are determined by markets. Regardless of that determination, the system will always provide its nation's with annual GDP and numbers of jobs greater than otherwise. ...

I did answer your question.

Respectfully, Supposn

 

[Supposn]

... Don't think I could prove it would, but I can think of plenty of ways it could.

Say we stop importing backhoes and instead use domestically produced shovels.
We just reduced imports and increased GDP by making more shovels. Double benefit.
We've also made the construction workers less productive, but at least we'll need to hire more
of them, so another bonus, more jobs.

Have we increased our standard of living?

nice try but sorry, no cigar.

The trade policy described in Wikipedia’s article entitled “Import Certificates” is substantially market rather than government driven. Within an Import Certificate nation, purchasers would be expected to purchase domestic shovels rather than imported backhoes, only if it were more financially advantageous for them to do so.

Within an Import Certificate environment, If there's effective USA demand for any foreign item, that item will inevitably be imported into our nation, (if it's otherwise legal to do so).

Respectfully, Supposn

Within an Import Certificate nation, purchasers would be expected to purchase domestic shovels rather than imported backhoes, only if it were more financially advantageous for them to do so.

You just made imported backhoes more expensive. This was the result.
Smaller trade deficit. More local production. Is your result better for the country?

The Import certificate policy would significantly reduce, if not entirely eliminate USA's chronic annual trade deficits of goods. It will increase our GDP and numbers of jobs more than otherwise.

It's substantially more a market rather than a government driven trade policy.

It will increase the price of imported backhoes and backhoe parts sold to USA purchasers. It will have no effect upon the prices of USA products sold to USA purchasers.

Due to market forces, it will usually behave as a price subsidy for USA exported goods, and its entire net expenses are passed on to USA purchasers of imported goods.

It is of some net advantage to all enterprises, (which including foreign enterprises), to the extent they produce goods in the USA and they compete or aspire to compete against foreign goods.

Yes, it will increase the prices of imported backhoes and yes, it would be an economic improvement.

Respectfully, Supposn

 

[Supposn]

... Within an Import Certificate environment, If there's effective USA demand for any foreign item, that item will inevitably be imported into our nation, (if it's otherwise legal to do so).

How is "effective demand" different than the demand we have now?

Toddsterpatriot, the difference between “demand” as used in class rooms, rather than “effective demand” is the difference between “want” rather than being willing to purchase, able to accept delivery, and able to pay the required price.

Respectfully, Supposn

 

[Supposn]

import certificates are merely another liberal tax or tariff on imports to impoverish Americans who buy imports and to further weaken American companies by protecting them from international competition.

EdwardBaiamonte, Import Certificate, (IC) policy provides enterprises producing goods in the USA, with some limited advantage over competing foreign produced goods; consequentially often reducing some of their disadvantages due to foreign goods.

How precisely would IC policy weaken any USA enterprise?

IC policy has no regard for the nationality of enterprises' owners; it does not discriminate among enterprises, or among foreign nations. Other than not being applicable to the values of specifically listed scarce or precious minerals materials integral the globally traded goods, it does not discriminate among types of goods. If we consider importing and exporting as a single global trade industry, it does not discriminate among industries.

All IC net costs, including all net costs to the federal government are passed on to final USA purchasers of imported goods. Would those costs actually “impoverish” USA purchasers?

Respectfully, Supposn

 

[Supposn]

... Every extra dollar the government creates contributes about $1.40 to GDP. ...

Econ4Every1, when the U.S. federal government prints an additional dollar, the purchasing power of the dollar, (i.e. the currency exchange rate or other measures of the dollar's value) is reduced. Government cannot produce additional value by simply issuing more dollars. It does not increase the value of the GDP.

When comparing historical GDPs, the dollar values are indexed in order to compare the “real” historical GDP values.

Respectfully, Supposn

 

[Toddsterpatriot]

... Don't think I could prove it would, but I can think of plenty of ways it could.

Say we stop importing backhoes and instead use domestically produced shovels.
We just reduced imports and increased GDP by making more shovels. Double benefit.
We've also made the construction workers less productive, but at least we'll need to hire more
of them, so another bonus, more jobs.

Have we increased our standard of living?

nice try but sorry, no cigar.

The trade policy described in Wikipedia’s article entitled “Import Certificates” is substantially market rather than government driven. Within an Import Certificate nation, purchasers would be expected to purchase domestic shovels rather than imported backhoes, only if it were more financially advantageous for them to do so.

Within an Import Certificate environment, If there's effective USA demand for any foreign item, that item will inevitably be imported into our nation, (if it's otherwise legal to do so).

Respectfully, Supposn

Within an Import Certificate nation, purchasers would be expected to purchase domestic shovels rather than imported backhoes, only if it were more financially advantageous for them to do so.

You just made imported backhoes more expensive. This was the result.
Smaller trade deficit. More local production. Is your result better for the country?

The Import certificate policy would significantly reduce, if not entirely eliminate USA's chronic annual trade deficits of goods. It will increase our GDP and numbers of jobs more than otherwise.

It's substantially more a market rather than a government driven trade policy.

It will increase the price of imported backhoes and backhoe parts sold to USA purchasers. It will have no effect upon the prices of USA products sold to USA purchasers.

Due to market forces, it will usually behave as a price subsidy for USA exported goods, and its entire net expenses are passed on to USA purchasers of imported goods.

It is of some net advantage to all enterprises, (which including foreign enterprises), to the extent they produce goods in the USA and they compete or aspire to compete against foreign goods.

Yes, it will increase the prices of imported backhoes and yes, it would be an economic improvement.

Respectfully, Supposn

The Import certificate policy would significantly reduce, if not entirely eliminate USA's chronic annual trade deficits of goods. It will increase our GDP and numbers of jobs more than otherwise.

Right. And while doing that it could also reduce our standard of living.

It's substantially more a market rather than a government driven trade policy.

Yes, the government would be using the market to make imports more expensive.

It will increase the price of imported backhoes and backhoe parts sold to USA purchasers. It will have no effect upon the prices of USA products sold to USA purchasers.

Personally, if I'm making a product in the US and the government suddenly makes my foreign competition more expensive, I'm going to raise my prices.

What would you do in that situation?

Due to market forces, it will usually behave as a price subsidy for USA exported goods, and its entire net expenses are passed on to USA purchasers of imported goods.

And additional expense is imposed on purchasers of similar US goods.

Yes, it will increase the prices of imported backhoes ​

Absolutely.​

​

and yes, it would be an economic improvement.​

​

Unproven.​

 

[Toddsterpatriot]

... Within an Import Certificate environment, If there's effective USA demand for any foreign item, that item will inevitably be imported into our nation, (if it's otherwise legal to do so).

How is "effective demand" different than the demand we have now?

Toddsterpatriot, the difference between “demand” as used in class rooms, rather than “effective demand” is the difference between “want” rather than being willing to purchase, able to accept delivery, and able to pay the required price.

Respectfully, Supposn

You're reducing the "effective demand" for these foreign backhoes by making them more expensive.
This may result in fewer purchased, fewer used and lower productivity.
Not sure that's one of the benefits you planned with this recommendation.

 

[Econ4Every1]

... Every extra dollar the government creates contributes about $1.40 to GDP. ...

Econ4Every1, when the U.S. federal government prints an additional dollar, the purchasing power of the dollar, (i.e. the currency exchange rate or other measures of the dollar's value) is reduced. Government cannot produce additional value by simply issuing more dollars. It does not increase the value of the GDP.

When comparing historical GDPs, the dollar values are indexed in order to compare the “real” historical GDP values.

Respectfully, Supposn

Here we get to the flaw in your thinking.

If the government creates $1 and offers it for 1 widget and the private sector supplies the widget for $1, then the purchasing power of the dollar=1 widget. If the government creates another dollar and wants to buy another widget, will the second widget cost more?

That depends. Does the widget maker have a monopoly? Since we, in theory, understand the harm done by monopolies, let's assume there are multiple companies that can supply widgets. So the question is, would the market supply widgets for $1 or would the suppliers of widgets raise their prices due to increased demand?

Again, it still depends. Do any the creators of widget makers have the existing equipment to increase demand without significant upgrades in machinery or labor. If yes, then that widget maker is likely to supply widgets at the same price and instead increase market share relative to other widget makers and increase profits via economies of scale even though the nominal price is the same.

Thus price inflation occurs in an economy when widespread demand is higher than widespread supply (we call that CPI).

Thus, in a free in fair market price inflation will not increase if:

1. There there aren't significant monopolies on the creation of widgets
2. There is at least one widget maker that can meet the increase in demand without significant investment or significant increases in raw material prices and labor

If at least (but perhaps not limited to) these conditions are met significant inflation will not occur as price inflation happens when demand exceeds supply. If suppliers can meet demand without the limitations I've outlined, then when the government creates dollars and spends them into the economy GDP increases exceed inflation increases. This leads to a higher standard of living as people have more money to purchase the things they need and want, regardless if the supply is foreign or domestic.

Therefore if you think IC's will generate increased supply here in the US, then you are already acknowledging that we have the capacity to meet demand, therefore the government's creation of new dollars won't cause inflation until the demand those dollars creates exceeds the capacity of the US economy to supply.

This chart lends evidence to the fact that our demand is significantly below capacity.

 

[Supposn]

It will increase the price of imported backhoes and backhoe parts sold to USA purchasers. It will have no effect upon the prices of USA products sold to USA purchasers.

Personally, if I'm making a product in the US and the government suddenly makes my foreign competition more expensive, I'm going to raise my prices.

What would you do in that situation?

Toddsterpatriot, I would purchase shares of USA producing enterprises competing with your company. They're all going to eat your lunch.

////////////////////////////////////////////////////////////////////////////////////////

Due to market forces, it, [USA's IC policy], will usually behave as a price subsidy for USA exported goods, and its entire net expenses are passed on to USA purchasers of imported goods.

And additional expense is imposed on purchasers of similar US goods.

Toddsterpatriot, if a USA Import Certificate policy were enacted, there would not be additional expenses imposed on purchasers of USA goods due to that policy; but purchasers of USA exports have good reason to expect and demand price reductions.
Both the price reductions of USA exports, and the additional costs to USA purchasers of imports, are positively related to the global market prices of Import certificates that were originally issued to exporters of USA goods.

You apparently don't recognize or don't share my appreciation for advantages due to independent competitive participants in competitive market-places. If USA adopted the Import Certificate, (IC) policy, what's an effectively a price subsidy of USA's exports, occurs at no apparent additional cost to anyone.

Exporters of USA goods would be motivated to request that their shipments be assessed and pay the federal IC fees, only because they correctly expect the certificates market values fully justify their inconvenience and expenses due to the ICs.

Competitive pressures from other competing exporters of USA goods and from their export markets will drive them to reduce their prices for exported USA goods.

Respectfully, Supposn

 

[Supposn]

Here we get to the flaw in your thinking.

If the government creates $1 and offers it for 1 widget and the private sector supplies the widget for $1, then the purchasing power of the dollar=1 widget. If the government creates another dollar and wants to buy another widget, will the second widget cost more? ...

Econ4Every1, we're off topic. If you wish to continue discussing the value of the U.S. dollar, please open another thread and I'll respond to you there.
I read no further than the quoted paragraph. I prefer to believe you have a real and logical concept to discuss.

I'm not upset by your theoretical widget, but rather the idea that because the government is able to buy widgets at $1 per widget, that necessarily determines the purchasing power of the U.S. dollar or indicates that I, an individual will be able to purchase only one single widget for only one dollar.

I'll try to keep looking for your thread regarding the value of the U.S. dollar.

Respectfully, Supposn

 

[Toddsterpatriot]

It will increase the price of imported backhoes and backhoe parts sold to USA purchasers. It will have no effect upon the prices of USA products sold to USA purchasers.

Personally, if I'm making a product in the US and the government suddenly makes my foreign competition more expensive, I'm going to raise my prices.

What would you do in that situation?

Toddsterpatriot, I would purchase shares of USA producing enterprises competing with your company. They're all going to eat your lunch.

////////////////////////////////////////////////////////////////////////////////////////

Due to market forces, it, [USA's IC policy], will usually behave as a price subsidy for USA exported goods, and its entire net expenses are passed on to USA purchasers of imported goods.

And additional expense is imposed on purchasers of similar US goods.

Toddsterpatriot, if a USA Import Certificate policy were enacted, there would not be additional expenses imposed on purchasers of USA goods due to that policy; but purchasers of USA exports have good reason to expect and demand price reductions.
Both the price reductions of USA exports, and the additional costs to USA purchasers of imports, are positively related to the global market prices of Import certificates that were originally issued to exporters of USA goods.

You apparently don't recognize or don't share my appreciation for advantages due to independent competitive participants in competitive market-places. If USA adopted the Import Certificate, (IC) policy, what's an effectively a price subsidy of USA's exports, occurs at no apparent additional cost to anyone.

Exporters of USA goods would be motivated to request that their shipments be assessed and pay the federal IC fees, only because they correctly expect the certificates market values fully justify their inconvenience and expenses due to the ICs.

Competitive pressures from other competing exporters of USA goods and from their export markets will drive them to reduce their prices for exported USA goods.

Respectfully, Supposn

They're all going to eat your lunch.

Why? They aren't going to raise their prices too?

Toddsterpatriot, if a USA Import Certificate policy were enacted, there would not be additional expenses imposed on purchasers of USA goods due to that policy;

You just raised the price of, for example, imported Japanese cars.
Aren't US based car manufacturers going to raise prices, by at least a portion of that increased price, to capture part of that government provided windfall?

You apparently don't recognize or don't share my appreciation for advantages due to independent competitive participants in competitive market-places.

But I do! You just made a portion of the supply....less competitive.

If USA adopted the Import Certificate, (IC) policy, what's an effectively a price subsidy of USA's exports, occurs at no apparent additional cost to anyone.

The additional cost is the higher price paid by consumers of imported goods. Not to mention the deadweight loss imposed by the higher domestic prices of like goods.

 

[Supposn]

Personally, if I'm making a product in the US and the government suddenly makes my foreign competition more expensive, I'm going to raise my prices.

What would you do in that situation?

Toddsterpatriot, I would purchase shares of USA producing enterprises competing with your company. They're all going to eat your lunch.

Why? They aren't going to raise their prices too?

No, I believe they'd prefer greater immediate and future increasing their net profits by increasing their sales and shares of their markets, while due to economies of scale, they'll be reducing their per unit production costs.

Respectfully, Supposn

You apparently don't recognize or don't share my appreciation for advantages due to independent competitive participants in competitive market-places.

But I do! You just made a portion of the supply....less competitive.

Yes, importers are to some extent less competitive but your USA competitors are stronger than before.

Respectfully, Supposn

If USA adopted the Import Certificate, (IC) policy, what's an effectively a price subsidy of USA's exports, occurs at no apparent additional cost to anyone.

The additional cost is the higher price paid by consumers of imported goods. Not to mention the deadweight loss imposed by the higher domestic prices of like goods.

The global market prices of Import certificates are additions embedded within imported goods prices to USA purchasers.

The differences between global markets' IC prices and exporters expenses due to acquiring and handling ICs, are positively related to the USA goods price discounts that foreign purchasers can expect or negotiate.

Other than for imported components, the Import Certificate policy does not add a penny to the prices of USA goods in any markets.

Respectfully, Supposn