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

[sparky]

Please. Show me where an otherwise lawful transaction between private parties is going to be deemed "against the public interest".

Didn't Alexander Hamilton , as sec of the treasury, detail this back when he held that office?

~S~

 

[william the wie]

No offense Buffet is a great investor and like his mentor Graham he has a lawyer partner to keep him from doing something financially brilliant and legally stupid with the firm's money. I bet he didn't run this idea by his lawyer partner Munger because it sure sounds legally stupid to me despite my having only two business law courses. Graham said all manner of sensible and nonsensical stuff to congress too without running it by Newman his legal partner. When somebody is making money hand over fist and wants to pontificate about something he knows nothing about so what? We all need to blow off steam sometimes.

 

[Supposn]

William the wie, the U.S. Congress has on occasion passed bills that were found to be unconstitutional. I suppose that’s what you mean by legally stupid?

Refer to a short 171 topic entitled “USA’s Trade Agreements” within
www.USA-Trade-Deficit.Blogspot.Com
None of the topics within this web site or the site
www.USA-Imports.Blogspot.Com
exceeds a single page length.

Respectfully, Supposn

 

[The Rabbi]

Please. Show me where an otherwise lawful transaction between private parties is going to be deemed "against the public interest".

Didn't Alexander Hamilton , as sec of the treasury, detail this back when he held that office?

~S~

No, he didn't.
Proposal fails.
Next topic.

 

[editec]

About 52% of Americans voted for Obama. So the figure is largely meaningless. Additionally most people think:
1) Outsourcing is primarily responsible for loss of jobs
2) Protecting domestic industries will create jobs.

Both of these are demonstrably and patently false.
The proposal puts us back into the old mercantilism mindset, with every country trying to export more than it imports. It didnt work too well then either.
Fortunately this has no chance whatsoever of passing.

Nice word patently...it sounds so authoritative.

Now prove it that outsourcing isn't responsible for the decline in wages and jobs.

Go ahead, I want to see HOW you prove this.

 

[editec]

People become wealthy by making transactions. If you artificially discourage making those transactions then you discourage wealth.
In this case even though a trade imbalance is a negative, the cure would be worse than the disease.

More assertions with absolutely no facts and not even any logic to support them.

You do understand the difference between a statement and an arugment supporting that statement, right?

 

[Supposn]

Please. Show me where an otherwise lawful transaction between private parties is going to be deemed "against the public interest".
When gov't can dictate who can sell what to whom on what terms we are in the gulag.

Rabbi,Within our history:

It was it illegal to keep persons in bondage.
It was illegal to import or keep slaves.
It was illegal for Government Supported Entities to deal in loans that were not federally insured.

It became legal for Government Supported Entities to deal in loans that were not federally insured.
My hope is that it will again become illegal for Government Supported Entities to deal in loans that were not federally insured.

It was legal for any bank to act an investment bank.
It became illegal for saving banks and other Federally Insured banks to act as investment banks.
I look forward to it again be prohibited for federally insured banks from to act as an investment banks.
[Refer to U.S. Message Board economic board’s topic entitled “Regulation of the finance industry”].

It was legal to drive an uninsured car on public roads. Now there are state laws prohibiting it.
It was legal to sell alcoholic beverages. Then it was illegal, now it is regulated.
There once were few if any laws governing the regulation of consumer products, buildings or zoning.

If I had the time, I’d find many previously legal commercial act that have later been declared to be illegal.

Respectfully, Supposn

 

[sparky]

Please. Show me where an otherwise lawful transaction between private parties is going to be deemed "against the public interest".

Didn't Alexander Hamilton , as sec of the treasury, detail this back when he held that office?

~S~

No, he didn't.
Proposal fails.
Next topic.

i refer you to This Article which has Hamiltons 11 point manifesto

For over 200 years, Hamilton's policy made America the most powerful industrial nation in the world; now – after just 28 years of Reagonomics and Clinton/Rubinomics – we are the largest importer of other people's industry, and the most indebted nation in the world.

The entirety of Hamilton's paper is easily found on the web. The first third of it deals with Jefferson's objections to it (which Jefferson withdrew later in his life), as Jefferson favored America being an agricultural rather than an industrial power in 1791. Once you cut past that, though, Hamilton gets right to the rationale for, and the details of, his 11-point plan to turn America into an industrial power and build a strong manufacturing-based middle class. Ironically, his policies are exactly – EXACTLY – what Japan, South Korea, and China are doing today. And what we have ceased to do.


~S~

 

[The Rabbi]

About 52% of Americans voted for Obama. So the figure is largely meaningless. Additionally most people think:
1) Outsourcing is primarily responsible for loss of jobs
2) Protecting domestic industries will create jobs.

Both of these are demonstrably and patently false.
The proposal puts us back into the old mercantilism mindset, with every country trying to export more than it imports. It didnt work too well then either.
Fortunately this has no chance whatsoever of passing.

Nice word patently...it sounds so authoritative.

Now prove it that outsourcing isn't responsible for the decline in wages and jobs.

Go ahead, I want to see HOW you prove this.

I am not here to do your research for you.
However, start here.
Myths and Realities: The False Crisis of Outsourcing | The Heritage Foundation

 

[sparky]

This is truely the weakest argument i've seen for free trade yet, not to mention 6 yrs old.....how many biz's have gone under or offshored since then?

seeing as we are somewhere in the area of a 70% service , as opposed to production GDP, i think we can regulate the HF to the trickle down contingent


Myth #4: Free trade, free labor, and free capital harm the U.S. economy.
An underlying myth is that economic freedom is a "race to the bottom" in which American workers must accept lower wages and fewer benefits in order to compete with low-cost labor in other countries.

Fact: Economic freedom is necessary for economic growth, new jobs, and higher living standards.

Countries that embrace economic freedom-including freedom of trade, labor, and capital-experience stronger economic growth than those that seek to thwart the market through regulatory hurdles and policy restrictions. The 2004 Index of Economic Freedom confirms a strong, positive relationship between economic freedom and per capita gross domestic product (GDP). Moreover, average GDP growth rates increase as a country's economic freedom score improves, as measured in the Index.[14]

In other words, policies that are antithetical to economic freedom, including trying to protect the jobs of a few workers from outsourcing, will inevitably retard economic growth and lead to fewer jobs in the future. Trade freedom is one aspect of economic freedom, of course, and the U.S. Trade Representative confirms that the benefits of free trade are staggering:

Last year alone, hidden import taxes cost American consumers $18 billion. Duty-free trade would eliminate these hidden costs and lower prices for consumers. While this proposal would offer substantial benefits to all Americans, it would particularly help low-income families. A recent study by the Progressive Policy Institute found that cutting U.S. import taxes especially benefits single-parent, low-income families, who typically pay a higher proportion of their income on import taxes than other households. A University of Michigan study found that the U.S. economy would expand by $95 billion as a result of tariff-free trade-contributing to job-creation and higher wages.[15]

A case in point is America's experience with the North American Free Trade Agreement (NAFTA), which has been a net boon for the U.S. economy and American workers. Employment in the U.S. increased by 20 million jobs between 1993 and 2000. In the 10 years since NAFTA's enactment, real hourly compensation has increased by 14.7 percent, including a 14.4 percent increase in manufacturing wages.[16] Trade among the three NAFTA nations has more than doubled, helping to lower prices for all consumers.

While free trade can cause localized pain for a few workers, the overall gains are overwhelming. The myth of lower wages due to increased trade is wrong on theory and wrong on the facts.

~S~

 

[The Rabbi]

This is truely the weakest argument i've seen for free trade yet, not to mention 6 yrs old.....how many biz's have gone under or offshored since then?

seeing as we are somewhere in the area of a 70% service , as opposed to production GDP, i think we can regulate the HF to the trickle down contingent

If the argument is so weak then you should have no problem refuting it. Please tell us how protecting some industries leads to higher GDP and employment overall. Please mention countries that have had strong protectionism and how well they are doing. Countries like say E.Germany.
And the argumetn is not six years old. It is like 200 years old. And it is as true today as it was then because economic laws are just that.
Business go out of business all the time. It is what Schumpeter called creative destruction and a necessary part of capitalism. You neglected to mention companies that have been formed in that time as well.

 

[Supposn]

Now prove it that outsourcing isn't responsible for the decline in wages and jobs.
Go ahead, I want to see HOW you prove this.

Editec, global trade itself is beneficial to its participants. It is trade deficits that are detrimental to the nation’s economy.

The first topic of www.USA-Trade-deficit.blogspot.com discusses what is witnessed globally within all societies when there is a significant introduction or decrease of production within all societies, all manner of governments and all economic systems. The extent of significant modification induces a much greater modification upon the society’s aggregate gross production.

There’s no economic benefit due to a trade deficit. Each dollar decrease of our trade deficit of goods induces a three dollar increase of our GDP. Our GDP bolsters our median.

Respectfully, Supposn

 

[Supposn]

This is truely the weakest argument i've seen for free trade yet, not to mention 6 yrs old.....how many biz's have gone under or offshored since then?

seeing as we are somewhere in the area of a 70% service , as opposed to production GDP, i think we can regulate the HF to the trickle down contingent

Myth #4: Free trade, free labor, and free capital harm the U.S. economy.
An underlying myth is that economic freedom is a "race to the bottom" in which American workers must accept lower wages and fewer benefits in order to compete with low-cost labor in other countries.

Sparky, I am not opposed to global trade but trade deficits are certainly detrimental to a nation’s economy. I’m a proponent of a policy that would decrease USA’s trade deficit and promotes USA’s exports. It would increase the sum of USA’s aggregate imports plus exports.

What do you mean by free labor? I am opposed to slave labor. How can I obtain free capital? I’m all for it if it’s free to me.

You write of a myth concerning “economic freedom”. I’m a proponent of free enterprise but not “pure” free trade.

You continue to use the term of “economic freedom” to describe what is evolving to be USA functioning as a nation of consumers and a source of raw materials for the major producers of goods. Permitting ourselves to become subservient of lower wage nations (until we eventually join them) is what’s described as a “race to the bottom” rather than “economic freedom”.

Pure free trade sacrifices our nation’s median family “real” income for the agenda and false promises of “one worlders”. I do believe that there policies are “the race to the bottom”.

You continue to defend free trade as if it were synonymous with global trade. This proposal would increase our global trade and decrease our trade deficit. It is pure free enterprise but it is not pure free trade.

Respectfully, Supposn

 

[Supposn]

While free trade can cause localized pain for a few workers, the overall gains are overwhelming. The myth of lower wages due to increased trade is wrong on theory and wrong on the facts.[/COLOR]

Sparky, just what do you mean by “localized pain for a few workers”? There's absolutely no “gains” due to a trade deficit.

Due to the GDP formula a trade deficit cannot contribute to a nation's GDP.

GDP only describes a nation’s production. GDP cannot describe what a nation’s production would be if the trade deficit were increased or decreased. A nation's GDP is less than otherwise due to any trade deficit.

[Due to the GDP formula a trade surplus certainly contributes to a nation's GDP].

Respectfully, Supposn

 

[The Rabbi]

While free trade can cause localized pain for a few workers, the overall gains are overwhelming. The myth of lower wages due to increased trade is wrong on theory and wrong on the facts.[/COLOR]

Sparky, just what do you mean by “localized pain for a few workers”? There's absolutely no “gains” due to a trade deficit.

Due to the GDP formula a trade deficit cannot contribute to a nation's GDP.

GDP only describes a nation’s production. GDP cannot describe what a nation’s production would be if the trade deficit were increased or decreased. A nation's GDP is less than otherwise due to any trade deficit.

[Due to the GDP formula a trade surplus certainly contributes to a nation's GDP].

Respectfully, Supposn

You keep making assertions without backing them up. When asked, you link to your own blog that makes the same assertions.
Your cure is worse than the disease. It is a non-solution to a non problem.

 

[Supposn]

Refer to: http://en.wikipedia.org/wiki/Import_Certificates
www.USA-Trade-Deficit.Blogspot,com
http://en.wikipedia.org/wiki/Gross_domestic_product

GDP = [C + I + G] + [eX - i]

[C + I + G] + [domestic expenditures lexcluding transfers of wealth]
C= Consimerspending, I- invesatment, G = government spending

[eX - i] = [net trade balance]
eX = exports, i = imports

Rabbi, your opinion,” Your cure is worse than the disease. It is a non-solution to a non problem” is itself a contradiction.

Did you mean to express your view that trade deficits are not detrimental to a nation’s GDP? Otherwise this is a trade proposal for a solution to a very real detriment to the GDP.

To believe Trade deficits are not detrimental to the GDP would seem to be contrary to intuitive logic.

By definition trade deficits can contribute nothing to a nation’s GDP. If we reverse a deficit trade balance, (i.e. if we transform it to be a trade surplus), the surplus certainly contributes to the nation’s GDP.

I iterate, GDP only describes a nation’s production. GDP cannot describe what a nation’s production would be if the trade deficit were increased or decreased. A nation's GDP is less than otherwise due to any trade deficit.

Respectfully, Supposn

 

[Supposn]

Transcript of November 19, 2010 letters sent by me to both Senator Feingold and Dorgan:

Respectfully, Supposn
///////////////////////////////////////

Senators Feingold and Dorgan, I regret that you two in particular will not be members of the 2011 United States Senate. By your sponsoring the Balanced Trade Restoration Act of 2006 you above all others elected officials best represented and attempted to advance my aspirations for our nation’s economy.

I do not particularly believe that that this political concept above all others would provide us with the greatest economic benefit, but it is among the few economic concepts which evoke my extreme confidence (that if enacted) it would be completely successful and is more likely (than other economic concepts) to attract support from both the left and right of our political spectrum. Within a future and more amicable political climate it could be passed by a U.S. Congress.

[I’m among those that believe the draft of the “Balanced Trade Restoration Act of 2006” has two significant but easily remedied faults.

Excerpts from Import Certificates - Wikipedia, the free encyclopedia : “They regret that assessments would not be adjusted to exclude the value of specifically listed scarce or precious minerals integral to the goods being assessed. 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”. ....................... “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”].

It would be to our nation’s advantage for you both to continue the extent of your political activities and most particularly do what you can to further advance this concept you first introduced to the U.S. Senate.

Refer to: www.USA-Trade-Deficit.Blogspot.com
and to: Import Certificates - Wikipedia, the free encyclopedia

Respectfully,

 

[Mr. H.]

Petroleum and petroleum products account for over half the trade deficit. Can't we just produce more and import less?

 

[Supposn]

Petroleum and petroleum products account for over half the trade deficit. Can't we just produce more and import less?

Mr. H, no, we cannot “produce” natural crude oil or natural gas.

“Fossil fuels” occurred naturally from prehistoric biological materials subject to very favourable natural circumstances and are difficult to find. As we exhaust the more easily and less expensive known resources of petroleum, we search for additional petroleum. As often as not the additional petroleum that we have found is of lesser quality and/or is more expensive to harvest.

[For example it is only due to technological advances that we are able to find and extract petroleum from the bottom of the sea. It is only the increased value of the scarcer materials that justifies the increased harvesting costs. Similarly we can synthesize petroleum from the fossil fuel coal which we have in greater (but not unlimited) natural reserve and/or from other materials. We can also synthesize petroleum from other materials and using other methods].

Similar to the adage “We often must spend more money to earn additional money”; we must increasingly consume more energy to create more energy producing fuels which in turn increases the cost of the additional energy we are producing. That’s why a more feasible national energy policy and the development of renewable energy fuels and sources are so critical to our nation and our planet.

Respectfully, Supposn

 

[Norman]

The trade deficit is caused because of overvalued dollar.

The reserve currency and china plus japan peg is the problem. If US would simply not sell bonds to them that could help...

And if they used a locked exchange value, US could lock too. Of course with that kind of controls china and japan are giving free stuff to US, so there is also the 3rd option of letting them learn the lesson and simply not pay for the stuff and default.

Certainly a hard issue.