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

[Widdekind]

Import Certificates would cost importers, and benefit exporters. Importers would subsidize exporters. Importers' increased costs would be passed on down through the stream of production, raising final prices, and lowering production volumes. A Public export subsidy would boost exports, without harming imports. If you want to help business, erecting more obstacles to trade, foreign or domestic, seems ill-conceived. Importers are doing good business -- why should they be penalized, because "the exporters across the street can't compete" ? There "has" to be a way to fight trade deficits, by increase trade, increasing business, increasing exports.




Import Certificates - Wikipedia, the free encyclopedia

 

[Toddsterpatriot]

Trade deficits are ALWAYS detrimental and trade surpluses ALWAYS contribute to their nations’ GDPs.

If that were true, you could eliminate all oil imports and our GDP would increase. Ridiculous.

ToddsterPatriot & Widdekind, you guys criticize without reading?

The market driven trade proposal would be an indirect but very effective subsidy of USA exported goods. The proposal is of no net expenditure to the federal budget. All net expenditures are borne by USA purchasers of foreign goods. They are the cause and should fund the remedy for USA's trade deficit of goods.

Respectfully, Supposn

Excerpted from message #239:

Our reference to needed imported raw materials and components are “red herrings” you’re disingenuously inserting into this discussion. The trade proposal explicitly excludes the values of specifically listed scarce or precious mineral materials integral to the valuation assessment of any goods.

The market driven trade proposal

Mandated by government is market driven? LOL!

would be an indirect but very effective subsidy of USA exported goods.

It would be a subsidy, not sure how effective it would be.

They are the cause and should fund the remedy for USA's trade deficit of goods.

This assumes that it is a problem that needs a remedy.
Americans have a lot of freedom to buy goods from anywhere in the world. This would certainly remedy (reduce) that freedom.

The trade proposal explicitly excludes the values of specifically listed scarce or precious mineral materials

Yes, because the proposers know that your claim, "Trade deficits are ALWAYS detrimental [to GDP]" is wrong.

 

[Toddsterpatriot]

Imports surge when domestic manufacturing surges of course. When the economy is healthier demand for both imported goods AND domestic goods increase. Some of you appear to be trying to make the case that the increased imports are CAUSING the increase in domestic production...

Good to know we all agree that increasing imports comes with more industrial production and that imports sure as hell don't hurt production.

How about we all first consider the possibility that import tax-cuts on raw materials lowers production costs and causes increased production --even as it increases imports. Next, lets consider the fact that opening up new open trade markets for finished products likewise increases both production and imports. Whether or not imports cause production doesn't matter if we adopt policies of import tax-cuts plus open markets --both of which will increase imports and production.

Widdekind, as your message implies but does not explicitly state, trade deficits are immediately detrimental to their nations’ GDP.

If (as I believe you are), contending USA’s trade deficit is a net contributor to our GDP), you’re contention’s incorrect. On the contrary, because product prices only includes the costs to producers, trade deficits’ detriment to their nations’ GDPs are understated; (i.e. our trade deficits’ detriment to USA’s GDP far exceeds the amounts of the deficits themselves.)

For further explanation refer to the first message of the topic “Trade deficits are ALWAYS detrimental to their nations’ GDPs”.

[You’ve never responded to the concept that the although the best interests of individual persons, families, enterprises, industries and our nation’s economy are generally more or less similar, there are identifiable business practices where they diverge. There are instances of our drafted laws and regulations prohibiting such practices and contracts.]
Trade deficits are certainly are detrimental to their nations’ GDP. Due to USA’s trade deficits our numbers and the purchasing powers of jobs are less than otherwise.

Your reference to needed imported raw materials and components are “red herrings” you’re disingenuously inserting into this discussion. The trade proposal explicitly excludes the values of specifically listed mineral materials integral to the valuation assessment of any goods.
A USA producer having a need for an imported component would obtain it. That component, similar to any other component will add to the price of finished product’s price and would be passed onto the final purchasers; it does put the U.S. producers to competitive disadvantage to any other of our producers who make competitive quality product at lesser cost and the trade proposal would be of net advantage to any U.S. enterprise competing against any foreign product.

ExPat Panama, you and Widdekind, rather than WE believe “increasing imports comes with more industrial production and that imports sure as hell don't hurt production”. You guys do not share my position in this matter.

For further explanation refer to the second message of the topic “Trade deficits are ALWAYS detrimental to their nations’ GDPs”.

Respectfully, Supposn

Trade deficits are certainly are detrimental to their nations’ GDP. Due to USA’s trade deficits our numbers and the purchasing powers of jobs are less than otherwise.

If oil imports were stopped today, would you have more purchasing power (gas would probably break double digits, now) or less. Would there be more jobs or fewer?

I agree, the dollar number of oil imports is subtracted in order to calculate US GDP, but it should be clear the benefit of the imported oil dwarfs the subtraction of $331 billion (last years crude imports) from the GDP equation.

 

[Widdekind]

the dollar number of oil imports is subtracted in order to calculate US GDP, but it should be clear the benefit of the imported oil dwarfs the subtraction of $331 billion (last years crude imports) from the GDP equation.

if the imports weren't worth at least that much, to US businesses, then they wouldn't import them. Basic economics says that trade is always a "win-win" (and has been since the stone-age). That said, "how do we pay for those valuable imports" ? Either with our own exports (stuff made today); or by selling off assets (land, buildings, businesses; stuff made yesterday); or by borrowing & owing even more tomorrow. At present, the US is doing more of the latter.

quick thought -- perhaps, to some extent, inflated prices today make it easier for the US to "export" pre-existing assets, built new yesterday at then-low prices; in comparison to exporting new products, built expensively today ?

 

[Toddsterpatriot]

the dollar number of oil imports is subtracted in order to calculate US GDP, but it should be clear the benefit of the imported oil dwarfs the subtraction of $331 billion (last years crude imports) from the GDP equation.

if the imports weren't worth at least that much, to US businesses, then they wouldn't import them. Basic economics says that trade is always a "win-win" (and has been since the stone-age). That said, "how do we pay for those valuable imports" ? Either with our own exports (stuff made today); or by selling off assets (land, buildings, businesses; stuff made yesterday); or by borrowing & owing even more tomorrow. At present, the US is doing more of the latter.

quick thought -- perhaps, to some extent, inflated prices today make it easier for the US to "export" pre-existing assets, built new yesterday at then-low prices; in comparison to exporting new products, built expensively today ?

if the imports weren't worth at least that much, to US businesses, then they wouldn't import them.

I know, but using logic and simple economics when talking to protectionists is pretty much a lost cause.

 

[expat_panama]

...you and Widdekind, rather than WE believe “increasing imports comes with more industrial production and that imports sure as hell don't hurt production”. You guys do not share my position in this matter. For further explanation refer to the second message...

--the point being--

...trade balance is baked into gross domestic product’s, (GDP’s) calculating formula...

Not in all GDP formulas. GDP can be added up several ways, and you may be thinking of how the trade deficit is subtracted with this one--

Y = C + I + E + G

Y = GDP
C = Consumer Spending
I = Investment made by industry
E = Excess of Exports over Imports
G = Government Spending​

​

--and it's ignored in these--

GDP = R + I + P + SA + W

R : rents
I : interests
P : profits
SA : statistical adjustments (corporate income taxes, dividends, undistributed corporate profits)
W : wages​

GDP = COE + GOS + GMI + TP & M – SP & M

Compensation of employees (COE) measures the total remuneration to employees for work done. It includes wages and salaries, as well as employer contributions to social security and other such programs.
Gross operating surplus (GOS) is the surplus due to owners of incorporated businesses. Often called profits, although only a subset of total costs are subtracted from gross output to calculate GOS.
Gross mixed income (GMI) is the same measure as GOS, but for unincorporated businesses. This often includes most small businesses.
TP & M – SP & M are taxes less subsidies on production and imports​

​

--and the trade deficit amount increases the GDP in this formula:

GDP = GNP + NR -E - NY – NCT + CAB

GNP = Gross National Product
NR = Net income from assets abroad (Net Income Receipts
E = Excess of Exports over Imports
NY = Net income abroad
NCT = Net current transfers
CAB = Current Account Balance​

​

...Trade deficits are certainly are detrimental to their nations’ GDP...

Only if you use the first formula. Other formulas have it neutral or beneficial. If you look at history, it's usually quite beneficial.

 

[Widdekind]

Imports & Exports are implied in every path towards computing GDP (which is why the numbers all add up to the same grand total). M,X are revenues into the business sector, from which wages, salaries, dividends flow out, as expenses:

Imports do reduce GDP -- money flows abroad for their stuff, instead of staying at home for domestic stuff. If the US could eliminate foreign oil dependency, by building nuclear power plants; then the US would be better off, being able to "make do" with domestic products -- allot like mowing your own lawns, or doing your own oil changes.

Yet, without imports, US industry would run out of raw materials, and nothing would get done. Fighting trade deficits, by boosting exports, would be better than penalizing imports. Let's say you implement I.C.s, and they eliminate the trade deficit. A hundred years from now, imports would be still be huge. What would the US be doing, to export equally vast volumes of production? So, lots of imports is not the problem -- the export shortfall is. Boosting exports "has" to be possible

 

[Supposn]

Trade agreements

The United States has trade agreements in force with 18 countries.

Additionally we’re party to multi-national agreements. To some extent we’ve diluted our national sovereignty to subject ourselves to international panels or court determinations.
I have not encountered any statistics of this matter but I suspect when the USA was the plaintiff our cases were more often ruled against.

On occasions even USA’s own representatives have traded away the interests of a U.S. industry in order to gain some other non-economic goal. I particularly recall the USA selling out Louisiana rice farmers because we wanted to retain military bases in Okinawa.

This proposal denies trade policy discretion to any entity, including the federal government. If such a law prevailed in the case of USA’s rice exports, no foreign or USA negotiators would attempt to trade away the interests of Louisiana rice farmers because it would be beyond their power to do so. They could negotiate for other USA payments or accommodations whose costs would be borne by our entire nation (rather than any particular industry or population group).

There are many examples of foreign and federal intervention to the detriment of individual USA industries and/or enterprises during our attempts to within the our seeking a pure free trade policy.

Under our present trade policy the government has not been willing and/or able to remedy USA enterprises’ disadvantages when attempting to participate in foreign trade. [Obama is now attempting to do so but I have little confidence in initiates that are begun just prior to general elections. Other presidents have attempted and not been particularly successful at defending USA enterprises' interests.

I’m generally opposed to USA entering bi-lateral or multi-lateral and unnecessary international aqreements. I can understand the desirability of such agreements concerning the ocean, global atmosphere or waterways systems shared by more than a single nation.

I prefer that each nation determine under what conditions who or what can enter our own nations. I have no objection to a nation refusing or restricting entry to any USA products providing that nation does not grant USA products lesser consideration that the imports from any other foreign nation.
[Regardless of whatever is USA’s trade policy, there’s a need for our government to protect our enterprises from such discrimination. We do not generally do so.]

Other than preventing USA’s imports from exceeding the assessed values of our exports, the most desirable characteristic of this market driven proposed Import Certificate policy is its denying all entities, (including the federal government any power to intervene into global trade.

Once enacted, other than assessing the values of goods and issuing Import Certificates the policy significantly reduces USA’ s trade deficit and without a single overt government act it does defend USA’s commercial enterprises.

You would think conservatives would be proponents of a market driven policy that’s lesser government power to intervene, no additional net government spending, increasing GDP median wage and exports?

Respectfully, Supposn

 

[Supposn]

Trade deficits are ALWAYS detrimental and trade surpluses ALWAYS contribute to their nations’ GDPs.

If that were true, you could eliminate all oil imports and our GDP would increase. Ridiculous.

ToddsterPatriot & Widdekind, you guys criticize without reading?

The market driven trade proposal would be an indirect but very effective subsidy of USA exported goods. The proposal is of no net expenditure to the federal budget. All net expenditures are borne by USA purchasers of foreign goods. They are the cause and should fund the remedy for USA's trade deficit of goods.

Respectfully, Supposn

Excerpted from message #239:

Your reference to needed imported raw materials and components are “red herrings” you’re disingenuously inserting into this discussion. The trade proposal explicitly excludes the values of specifically listed scarce or precious mineral materials integral to the valuation assessment of any goods.

The trade proposal explicitly excludes the values of specifically listed scarce or precious mineral materials

Yes, because the proposers know that your claim, "Trade deficits are ALWAYS detrimental [to GDP]" is wrong.

Extracted from: Import Certificates - Wikipedia, the free encyclopedia

We should discourage the export of cast gold paper weights encrusted with gems in order to facilitate importing high-tech or labor intensive goods. This fault could severely undermine the bill’s economic benefit to our nation.
Natural gas and oil should have also been included in such a scarce or precious minerals list. The proposal itself should not favor the export or inhibit the import of such scarce minerals. (The original U.S. Senate draft temporarily (for only 5 years) excluded the entire value of goods containing petroleum).
The act should be self-funding. Only those exporters of goods from the USA who choose to pay fees that would fund all of the act’s entire net expenses should have their goods assessed and receive the transferable ICs based upon that assessment. Exporter’s potential profits would motivate them to pay those fees.

 

[Toddsterpatriot]

ToddsterPatriot & Widdekind, you guys criticize without reading?

The market driven trade proposal would be an indirect but very effective subsidy of USA exported goods. The proposal is of no net expenditure to the federal budget. All net expenditures are borne by USA purchasers of foreign goods. They are the cause and should fund the remedy for USA's trade deficit of goods.

Respectfully, Supposn

Excerpted from message #239:

Your reference to needed imported raw materials and components are “red herrings” you’re disingenuously inserting into this discussion. The trade proposal explicitly excludes the values of specifically listed scarce or precious mineral materials integral to the valuation assessment of any goods.

The trade proposal explicitly excludes the values of specifically listed scarce or precious mineral materials

Yes, because the proposers know that your claim, "Trade deficits are ALWAYS detrimental [to GDP]" is wrong.

Extracted from: Import Certificates - Wikipedia, the free encyclopedia

We should discourage the export of cast gold paper weights encrusted with gems in order to facilitate importing high-tech or labor intensive goods. This fault could severely undermine the bill’s economic benefit to our nation.
Natural gas and oil should have also been included in such a scarce or precious minerals list. The proposal itself should not favor the export or inhibit the import of such scarce minerals. (The original U.S. Senate draft temporarily (for only 5 years) excluded the entire value of goods containing petroleum).
The act should be self-funding. Only those exporters of goods from the USA who choose to pay fees that would fund all of the act’s entire net expenses should have their goods assessed and receive the transferable ICs based upon that assessment. Exporter’s potential profits would motivate them to pay those fees.

The claim, "Trade deficits are ALWAYS detrimental [to GDP]" is wrong.

 

[EdwardBaiamonte]

The claim, "Trade deficits are ALWAYS detrimental [to GDP]" is wrong.

of course a Republican free market makes trade deficits impossible.

Imagine a very very intelligent and efficient person trading with a dumb inefficient
person. One has a toyota and one has a mule to trade. If the guy is not willing to trade his toyota for a mule no deficit is possible. If he is willing to trade then again no deficit is possible.

If the guy with a toyota is will to trade for 20 mules, and the deal is struck, then again no deficit is possible.

Only liberals can create deficits by interfering with the free market.

 

[Supposn]

...you and Widdekind, rather than WE believe “increasing imports comes with more industrial production and that imports sure as hell don't hurt production”. You guys do not share my position in this matter. For further explanation refer to the second message...

--the point being--

...trade balance is baked into gross domestic product’s, (GDP’s) calculating formula...

Not in all GDP formulas. GDP can be added up several ways, and you may be thinking of how the trade deficit is subtracted with this one--

Y = C + I + E + G

Y = GDP
C = Consumer Spending
I = Investment made by industry
E = Excess of Exports over Imports
G = Government Spending​

​

--and it's ignored in these--

GDP = R + I + P + SA + W

R : rents
I : interests
P : profits
SA : statistical adjustments (corporate income taxes, dividends, undistributed corporate profits)
W : wages​

GDP = COE + GOS + GMI + TP & M – SP & M

Compensation of employees (COE) measures the total remuneration to employees for work done. It includes wages and salaries, as well as employer contributions to social security and other such programs.
Gross operating surplus (GOS) is the surplus due to owners of incorporated businesses. Often called profits, although only a subset of total costs are subtracted from gross output to calculate GOS.
Gross mixed income (GMI) is the same measure as GOS, but for unincorporated businesses. This often includes most small businesses.
TP & M – SP & M are taxes less subsidies on production and imports​

​

--and the trade deficit amount increases the GDP in this formula:

GDP = GNP + NR -E - NY – NCT + CAB

GNP = Gross National Product
NR = Net income from assets abroad (Net Income Receipts
E = Excess of Exports over Imports
NY = Net income abroad
NCT = Net current transfers
CAB = Current Account Balance​

​

ExPat Panama, There are much lesser employed formulas for calculating GDP. They are less used because the necessary statistics to be plugged into those other formulas are more difficult to gather in an accurate manner. To the extent of their statistical factors’ accuracy, any and all those formulas that have been acceptable to the worlds’ communities of statisticians and economists should yield similar (i.e. not precisely the same) resulting GDP figures.

Do you have a web link for the formula Y = C + I + E + G ?
I suspect you misunderstood or the link has mistaken what E represents. It is not always a positive number. A positive "E" represents a positive trade balance, (i.e. a trade surplus); a negative value of "E" represents a negative trade balance, (a trade deficit).

Regardless of what you believe or what we will find within the links to the other formulas you provided, they DO NOT calculate GDP.
National gross domestic product is defined as the total value of all goods and service products produced within the nation’s borders. GDP deliberately excludes transfers of wealth.

Respectfully, Supposn

 

[Supposn]

Import Certificates would cost importers, and benefit exporters. Importers would subsidize exporters. Importers' increased costs would be passed on down through the stream of production, raising final prices, and lowering production volumes. A Public export subsidy would boost exports, without harming imports. If you want to help business, erecting more obstacles to trade, foreign or domestic, seems ill-conceived. Importers are doing good business -- why should they be penalized, because "the exporters across the street can't compete" ? There "has" to be a way to fight trade deficits, by increase trade, increasing business, increasing exports.

Import Certificates - Wikipedia, the free encyclopedia

Widdekind, Import Certificates are NOT an ultimate cost to USA importers. All net expenditures due to this trade policy are ultimately borne by USA purchasers of foreign goods. All of those expenditures would not be a additional penny more than they themselves determine to be is the additional worth of those imports to themselves.

Exporters will determine that CHOOSING to pay federal fees for acquiring Import Certificates, (ICs) is to their advantage. Furthermore I believe that exporters would devote significant portions of the margins between ICs’ acquisition and open market prices to decreasing the prices of their USA export goods.
[I expect conservatives in particular to appreciate the concept of decreased prices increasing sales volumes and net profits].

It would be the pressure from competing exporters of USA goods and foreign purchasers, (rather than any government regulations) that would indirectly but very effectively induce increased sales of USA exported goods. [Of course if exporters of USA goods are able somehow not reduce their potential greater net profits and retain the entire margin of profits derived from ICs, they should and they will do so.
Conservatives should understand and be amiable to that concept.

Respectfully, Supposn

 

[Toddsterpatriot]

Import Certificates would cost importers, and benefit exporters. Importers would subsidize exporters. Importers' increased costs would be passed on down through the stream of production, raising final prices, and lowering production volumes. A Public export subsidy would boost exports, without harming imports. If you want to help business, erecting more obstacles to trade, foreign or domestic, seems ill-conceived. Importers are doing good business -- why should they be penalized, because "the exporters across the street can't compete" ? There "has" to be a way to fight trade deficits, by increase trade, increasing business, increasing exports.

Import Certificates - Wikipedia, the free encyclopedia

Widdekind, Import Certificates are NOT an ultimate cost to USA importers. All net expenditures due to this trade policy are ultimately borne by USA purchasers of foreign goods. All of those expenditures would not be a additional penny more than they themselves determine to be is the additional worth of those imports to themselves.

Exporters will determine that CHOOSING to pay federal fees for acquiring Import Certificates, (ICs) is to their advantage. Furthermore I believe that exporters would devote significant portions of the margins between ICs’ acquisition and open market prices to decreasing the prices of their USA export goods.
[I expect conservatives in particular to appreciate the concept of decreased prices increasing sales volumes and net profits].

It would be the pressure from competing exporters of USA goods and foreign purchasers, (rather than any government regulations) that would indirectly but very effectively induce increased sales of USA exported goods. [Of course if exporters of USA goods are able somehow not reduce their potential greater net profits and retain the entire margin of profits derived from ICs, they should and they will do so.
Conservatives should understand and be amiable to that concept.

Respectfully, Supposn

Widdekind, Import Certificates are NOT an ultimate cost to USA importers. All net expenditures due to this trade policy are ultimately borne by USA purchasers of foreign goods.

Yes! We must punish those Americans who enjoy the freedom of purchasing from foreigners. How dare they! We should send some UAW thugs to their house to teach them a lesson.

 

[expat_panama]

...trade balance is baked into gross domestic product’s, (GDP’s) calculating formula...

Not in all GDP formulas. GDP can be added up several ways, and you may be thinking of how the trade deficit is subtracted with this one--

Y = C + I + E + G

Y = GDP
C = Consumer Spending
I = Investment made by industry
E = Excess of Exports over Imports
G = Government Spending​

​

--and it's ignored in these--

GDP = R + I + P + SA + W

R : rents
I : interests
P : profits
SA : statistical adjustments (corporate income taxes, dividends, undistributed corporate profits)
W : wages​

GDP = COE + GOS + GMI + TP & M – SP & M

Compensation of employees (COE) measures the total remuneration to employees for work done. It includes wages and salaries, as well as employer contributions to social security and other such programs.
Gross operating surplus (GOS) is the surplus due to owners of incorporated businesses. Often called profits, although only a subset of total costs are subtracted from gross output to calculate GOS.
Gross mixed income (GMI) is the same measure as GOS, but for unincorporated businesses. This often includes most small businesses.
TP & M – SP & M are taxes less subsidies on production and imports​

​

--and the trade deficit amount increases the GDP in this formula:

GDP = GNP + NR -E - NY – NCT + CAB

GNP = Gross National Product
NR = Net income from assets abroad (Net Income Receipts
E = Excess of Exports over Imports
NY = Net income abroad
NCT = Net current transfers
CAB = Current Account Balance​

​

...Do you have a web link for the formula Y = C + I + E + G ?...

If you google [key words: what is the formula for the GDP? "Y = C + I + E + G"] they come up with a lot of links, it's actually the traditional 'text-book' formula.

...I suspect you misunderstood or the link has mistaken what E represents. It is not always a positive number. A positive "E" represents a positive trade balance, (i.e. a trade surplus); a negative value of "E" represents a negative trade balance, (a trade deficit)...

Hopefully you'll see what I'm talking about after you check out the links. In the formula you mentioned a more negative trade deficit reduces the other numbers to arrive at the GDP, and in the fourth formula it adds to different numbers to get to the same GDP. Same GDP, one formula gets it by adding in the trade deficit, the other gets there by subtracting, and the other two ignore the trade deficit altogether.

Just the same, historic data show that the GDP increases when imports grow more than exports.

 

[Supposn]

Widdekind, Import Certificates are NOT an ultimate cost to USA importers. All net expenditures due to this trade policy are ultimately borne by USA purchasers of foreign goods.

Yes! We must punish those Americans who enjoy the freedom of purchasing from foreigners. How dare they! We should send some UAW thugs to their house to teach them a lesson.

ToddsterPatriot, under the market driven Import Certificate policy USA could still purchase cheaper, but not the absolute cheapest priced imported goods. We can’t afford the absolute cheapest.

Wage earning families benefit from cheap foreign goods but that doesn’t compensate them for our trade deficit of goods detriment to our GDP, numbers of jobs and our median wage.

The Import Certificate proposal mandates importers to surrender ICs covering the assessed value of their goods and it issues ICs to exporters of U.S. goods that CHOOSE to pay the federal fees that defray all federal expenses due to this policy. Unlike our current attempts at pure free trade, it doesn’t grant global trade policy discretion to any entity (including the U.S. federal government).

Refer to message #248, “Trade agreements”.

Respectfully, Supposn

 

[Toddsterpatriot]

Widdekind, Import Certificates are NOT an ultimate cost to USA importers. All net expenditures due to this trade policy are ultimately borne by USA purchasers of foreign goods.

Yes! We must punish those Americans who enjoy the freedom of purchasing from foreigners. How dare they! We should send some UAW thugs to their house to teach them a lesson.

ToddsterPatriot, under the market driven Import Certificate policy USA could still purchase cheaper, but not the absolute cheapest priced imported goods. We can’t afford the absolute cheapest.

Wage earning families benefit from cheap foreign goods but that doesn’t compensate them for our trade deficit of goods detriment to our GDP, numbers of jobs and our median wage.

The Import Certificate proposal mandates importers to surrender ICs covering the assessed value of their goods and it issues ICs to exporters of U.S. goods that CHOOSE to pay the federal fees that defray all federal expenses due to this policy. Unlike our current attempts at pure free trade, it doesn’t grant global trade policy discretion to any entity (including the U.S. federal government).

Refer to message #248, “Trade agreements”.

Respectfully, Supposn

under the market driven Import Certificate policy USA could still purchase cheaper, but not the absolute cheapest priced imported goods. We can’t afford the absolute cheapest.

Yes, this government imposed program would make imports more expensive.

Wage earning families benefit from cheap foreign goods but that doesn’t compensate them for our trade deficit of goods detriment to our GDP, numbers of jobs and our median wage.

Yes, government restrictions on freedom often increase middle class jobs and wages.
Maybe you could give me a few examples?

 

[Supposn]

Not in all GDP formulas. GDP can be added up several ways, and you may be thinking of how the trade deficit is subtracted with this one--

Y = C + I + E + G

Y = GDP
C = Consumer Spending
I = Investment made by industry
E = Excess of Exports over Imports
G = Government Spending​

​

--and it's ignored in these--

GDP = R + I + P + SA + W

R : rents
I : interests
P : profits
SA : statistical adjustments (corporate income taxes, dividends, undistributed corporate profits)
W : wages​

GDP = COE + GOS + GMI + TP & M – SP & M

Compensation of employees (COE) measures the total remuneration to employees for work done. It includes wages and salaries, as well as employer contributions to social security and other such programs.
Gross operating surplus (GOS) is the surplus due to owners of incorporated businesses. Often called profits, although only a subset of total costs are subtracted from gross output to calculate GOS.
Gross mixed income (GMI) is the same measure as GOS, but for unincorporated businesses. This often includes most small businesses.
TP & M – SP & M are taxes less subsidies on production and imports​

​

--and the trade deficit amount increases the GDP in this formula:

GDP = GNP + NR -E - NY – NCT + CAB

GNP = Gross National Product
NR = Net income from assets abroad (Net Income Receipts
E = Excess of Exports over Imports
NY = Net income abroad
NCT = Net current transfers
CAB = Current Account Balance​

​

...Do you have a web link for the formula Y = C + I + E + G ?...

If you google [key words: what is the formula for the GDP? "Y = C + I + E + G"] they come up with a lot of links, it's actually the traditional 'text-book' formula.

...I suspect you misunderstood or the link has mistaken what E represents. It is not always a positive number. A positive "E" represents a positive trade balance, (i.e. a trade surplus); a negative value of "E" represents a negative trade balance, (a trade deficit)...

Hopefully you'll see what I'm talking about after you check out the links. In the formula you mentioned a more negative trade deficit reduces the other numbers to arrive at the GDP, and in the fourth formula it adds to different numbers to get to the same GDP. Same GDP, one formula gets it by adding in the trade deficit, the other gets there by subtracting, and the other two ignore the trade deficit altogether.

Just the same, historic data show that the GDP increases when imports grow more than exports.

ExPat Panama, thank you for this response.
I find the formulas that I’ve found thus far on the sites you linked me are in actuality the same conventional expenditure formula that we’ve been discussing for some time. Some simply express the nation’s balance of global trade in a somewhat different manner.
I haven’t yet found the sites with these other formulas that you posted. They’re labeled as GDP but I doubt their authenticity because GDP reports only production of goods and service products. GDP definitely excludes transfers of wealth.
Regarding your “historic data”; you’re confusing cause and effect.
Respectfully, Supposn
GDP = R + I + P + SA + W
R : rents
I : interests
P : profits
SA : statistical adjustments (corporate income taxes, dividends, undistributed corporate profits)
W : wages

GDP = COE + GOS + GMI + TP & M – SP & M
Compensation of employees (COE) measures the total remuneration to employees for work done. It includes wages and salaries, as well as employer contributions to social security and other such programs.
Gross operating surplus (GOS) is the surplus due to owners of incorporated businesses. Often called profits, although only a subset of total costs are subtracted from gross output to calculate GOS.
Gross mixed income (GMI) is the same measure as GOS, but for unincorporated businesses. This often includes most small businesses.
TP & M – SP & M are taxes less subsidies on production and imports


Excerpted from Calculating GDP
Tutorial: How to calculate the GDP
The basic formula for calculating the GDP is:

Y = C + I + E + G …………………………….
……………………The next component is E, or the difference between the value of all exports and the value of all imports. If Exports exceeds imports, it adds to the GDP. If not, it subtracts from the GDP. Thus, even if a nation's people work very hard to produce products for exports, but still import more than they export, the nation's GDP will be negatively impacted. This is one of the reasons trade deficits are frequently a political target. Because the balance of trade can be either positive or negative, we can rewrite the equation, showing the components of E, using X for Exports and M for Imports:
Y = C + I + (X - M)+ G
You may see the formula for the GDP written this way, and it may be easier for you to remember in this format.
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[Supposn]

Yes, government restrictions on freedom often increase middle class jobs and wages.
Maybe you could give me a few examples?

ToddsterPatriot, no offhand I cannot give you examples of our government’s seeking pure free trade having increased middle class jobs and wages.

Almost every case of the U.S. government being a plaintiff before international courts or judges are instances where we claim that the free trade as operated within the applicable trade agreements have been detrimental to our GDP and/or our commercial enterprises and/or our numbers of jobs, and/or some specific U.S. industries profits or wage scales and/or our median wage.

I haven’t encountered statistics regarding our wins and losses but my casual reading and exposure to this topic lead me to suppose that in most cases the verdicts have gone against the USA. We undermine both our sovereignty and our economy at the same time.

Respectfully, Supposn

 

[Toddsterpatriot]

Yes, government restrictions on freedom often increase middle class jobs and wages.
Maybe you could give me a few examples?

ToddsterPatriot, no offhand I cannot give you examples of our government’s seeking pure free trade having increased middle class jobs and wages.

Almost every case of the U.S. government being a plaintiff before international courts or judges are instances where we claim that the free trade as operated within the applicable trade agreements have been detrimental to our GDP and/or our commercial enterprises and/or our numbers of jobs, and/or some specific U.S. industries profits or wage scales and/or our median wage.

I haven’t encountered statistics regarding our wins and losses but my casual reading and exposure to this topic lead me to suppose that in most cases the verdicts have gone against the USA. We undermine both our sovereignty and our economy at the same time.

Respectfully, Supposn

ToddsterPatriot, no offhand I cannot give you examples of our government’s seeking pure free trade having increased middle class jobs and wages

After NAFTA passed exports to both Canada and Mexico greatly increased.
Exports to Mexico nearly quintupled to date.
Exports to Canada nearly tripled.
That doesn't create jobs?
Now where were those examples of government restricting freedom that coincided with increased jobs and wages?

I'm curious, why is oil exempted from this marvelous freedom reducing idea?
Oil imports definitely increase our trade deficit, so they must hurt our GDP.
Why don't you want to ban oil imports, to increase GDP?