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Import Certificates

I'm Supposn

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I’m a proponent of a proposed unilateral policy for a nation’s global trade as described by Wikipedia’s article “Import Certificates”.
.
The proposal’s suitable only for enactment by nations’ that otherwise would be experiencing chronic annual trade global trade deficits of goods.

The proposal would reduce if not entirely eliminate the nation’s trade deficit of goods while increasing its GDP more than otherwise.
It’s an indirect but effective subsidy of the nation’s exported goods; its entire direct net costs would be passed on to USA purchasers of imported goods.

It’s substantially much more market rather than government driven.
The U.S. Customs Service would by law be enabled to approximate value of goods within the USA and expressed in U.S. dollars and complying with federal guidelines that are annually reviewed and then (updated if necessary).

Annual trade deficits are immediate drags upon their nation's GDPs and consequentially drag upon their nation's numbers of jobs, employment incomes and wage-rates.

Respectfully, Supposn
 

OrphanSlug

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We know you support import certificates, there has been threads on the subject and attempts to derail other economic discussion threads to talk about this.
 

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From an MMT sectoral flows perspective, balancing trade could theoretically be as useful as deficit spending, but pragmatically less so, when you consider where the gains would be going.
 

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From an MMT sectoral flows perspective, balancing trade could theoretically be as useful as deficit spending, but pragmatically less so, when you consider where the gains would be going.

Gavinfielder, MMT? Modern monetary theory?

Gavinfielder & orphanSlug, the thread’s topic is of a specific rather than some less specific or any other Import Certificate proposal. It is not in regard to some generality such as “balancing trade”.

I’m supposing you guys have nothing specific and explicit to post regarding that proposal?

Respecfully, Supposn
 

gavinfielder

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Gavinfielder, MMT? Modern monetary theory?

Gavinfielder & orphanSlug, the thread’s topic is of a specific rather than some less specific or any other Import Certificate proposal. It is not in regard to some generality such as “balancing trade”.
So the wikipedia article you mentioned wasn't the one that started with "Import certificates are a proposed mechanism to implement balanced trade"?
 

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So the wikipedia article you mentioned wasn't the one that started with "Import certificates are a proposed mechanism to implement balanced trade"?

Gavinfielder, Import Certificates is the correct Wikipedia article. The article stated “Many who are aware of the ”Balanced Trade Restoration Act of 2006” text find it has faults that could have been easily corrected: … “.
It is proposed concept of Import certificates with those updates that I specifically advocate.

Although the act’s title includes the words “balanced trade”, the act does not guarantee “balanced” trade of the nation’s aggregate globally traded goods and service products or even just goods. The proposal itself can only be applied to globally traded goods.

If adopted it would certainly and significantly reduce if not entirely eliminate the nation’s trade deficit of GOODS in an economically superior manner that would be to the nations best economic benefit.

Balance of trade is only one of GDP’s four major components and doesn’t determine the entire GDP. But due to the adoption of this Import Certificate policy the nation’s GDP would be greater than otherwise; 0therwise being if it were not adopted)

Respectfully, Supposn
 

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If adopted it would certainly and significantly reduce if not entirely eliminate the nation’s trade deficit of GOODS in an economically superior manner that would be to the nations best economic benefit.

Balance of trade is only one of GDP’s four major components and doesn’t determine the entire GDP. But due to the adoption of this Import Certificate policy the nation’s GDP would be greater than otherwise; 0therwise being if it were not adopted)
Ok, great, so I understood correctly that the discussion is first premised on a perceived benefit to balancing trade. It was that premise I was questioning. I gather that the character of your #5 post is that you wish to override and move past that, is that correct?
 

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Ok, great, so I understood correctly that the discussion is first premised on a perceived benefit to balancing trade. It was that premise I was questioning. I gather that the character of your #5 post is that you wish to override and move past that, is that correct?

Gavinfielder, yes; the Import Certificate concept does not guarantee or particularly seek “balanced trade”.

It significantly reduces if not eliminates USA’s trade deficits of goods while not reducing but rather increasing USA’s GDP (more than otherwise).

Respectfully, Supposn
 

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Transcript of the post:
http://www.debatepolitics.com/us-pa...nders-remedy-usa-s-global-trade-deficits.html

Originally Posted by OrphanSlug:
... The idea of "import certificates" does have some pluses and minuses. My suspicion though is the concept would lean heavy to larger organizations that have more means to obtain them open market speaking, and cause perhaps unbalance with smaller organizations that have adopted a business model reliant on imported goods and services. Perhaps more importantly someone has to set the cap, and presumably control the import certificate market otherwise it all becomes a private market (and we have too many examples of what happens when collections of wealth create private exchanges that tend to cause economic bubbles.) ...
/////////////////////////////

OrphanSlug, I have confidence in private independent and competitive enterprises. But I’m opposed to our current trade policy, (or lack of policy) that puts us at economic disadvantage to low-wage nations.
I also believe that even if brokerage houses would participate in the global market of transferable certificates, a good proportion of those transactions will be internet transactions.

[If used cars can be bought or sold over the internet, certainly the certificates can also be bought and sold. They differ only by their different dollar face values expressed in dollars and the U.S. Treasury’s certificate number to prevent fraud. A rancher in Wyoming will be able to obtain them as easily as will a Boeing aircraft executive in a West coast office building.]

The global market for Import certificates cannot be “cornered” because additional transferable certificates can be created whenever goods are exported from the USA. If the certificates market prices are sufficiently high, entrepreneurs will export USA goods that previously were marginally too expense for the global market.

Due to increased market price of the certificates they acquire (by paying the comparatively small federal fees), exporters of USA goods could afford to sell their exported goods at a small loss while regain their loss and make additional profit due to the values of the certificates they acquired.

Competitive pressures induce exporters to reduce their prices and gain additional sales volumes. Higher certificate prices behave as an indirect but effective subsidy of USA’s exported goods.

The reverse occurs when USA purchasers “balk” at higher prices for imported goods, the prices of certificates within the global markets will be reduced and consequentially prices of imported goods sold within the USA and the subsidies of USA exports will also be reduced.

Other than existing laws regarding fraud or counterfeiting, the transferable certificates require no special regulating by the government. The Global market for the transferable Import Certificates will be entirely market regulated.
There’s no such thing as certificate price that is too high or low.

Respectfully, Supposn
 

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Interesting Question.
… PS: I am not at all sure I like the certificate system. It is not necessarily a bad mechanism. I do suspect that it would reduce efficiency of allocation. If we installed such an instrument it would certainly work best with an exchange that permitted an efficient search and find mechanism for trading the import/export certificates. In a way, it would duplicate the foreign exchange technology and it is not clear, that it would work better, while adding an additional layer of operations and cost.


JoG, it does not simply “duplicate the foreign exchange technology”. Foreign exchange technology does not significantly reduce if not entirely eliminate USA’s trade deficit while rather than reducing would increase our GDP more than otherwise.
Import Certificate act as an indirect but effective subsidy of USA’s exported goods.
Places a market determined “cap” upon the volumes of low wage nations’ products detriments to USA’s numbers of jobs and wage rates.
Additionally the markets still determine which imported goods the USA will or will not import; (i.e. import “allocation”).

The proposal is much more market rather than government regulated.

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

Excerpts from the 5:00 AM, May 13, 2016 of this thread:

I have confidence in private independent and competitive enterprises. But I’m opposed to our current trade policy, (or lack of policy) that puts us at economic disadvantage to low-wage nations.
I also believe that even if brokerage houses would participate in the global market of transferable certificates, a good proportion of those transactions will be internet transactions. …

[The post contains a brief but adequate description of the markets’ Import Certificates’ regulating. The market’s natural behavior regarding transferable certificates would in almost all cases be superior to whatever can be drafted and enforced by humans.]

Other than existing laws regarding fraud or counterfeiting, the transferable certificates require no special regulating by the government. The Global market for the transferable Import Certificates will be entirely market regulated.
There’s no such thing as certificate price that is too high or low.

Respectfully, Supposn
 
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drz-400

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I’m a proponent of a proposed unilateral policy for a nation’s global trade as described by Wikipedia’s article “Import Certificates”.
.
The proposal’s suitable only for enactment by nations’ that otherwise would be experiencing chronic annual trade global trade deficits of goods.

The proposal would reduce if not entirely eliminate the nation’s trade deficit of goods while increasing its GDP more than otherwise.
It’s an indirect but effective subsidy of the nation’s exported goods; its entire direct net costs would be passed on to USA purchasers of imported goods.

It’s substantially much more market rather than government driven.
The U.S. Customs Service would by law be enabled to approximate value of goods within the USA and expressed in U.S. dollars and complying with federal guidelines that are annually reviewed and then (updated if necessary).

Annual trade deficits are immediate drags upon their nation's GDPs and consequentially drag upon their nation's numbers of jobs, employment incomes and wage-rates.

Respectfully, Supposn

Why should I have to pay dramatically more for products? All this does is make the US poorer.
 

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Why should I have to pay dramatically more for products? All this does is make the US poorer.

DRZ-400, annual trade deficits are ALWAYS a drag upon their nation’s production, (i.e. their GDP).
Consequentially that drags upon their numbers of jobs and their wage rates, which employees are dependent upon.
USA’s economy is highly sensitive to the purchasing powers of employees and additionally to their immediate dependents and the many commercial and other entities that are in aggregate among, if not the greatest drivers of our economy.

We all benefit from cheaper imported goods but that doesn’t compensate for trade deficits’ net detriment to our nation’s economy.

We cannot expect every person and enterprise to behave altruistically but we can draft our trade policy laws for our aggregate individuals and enterprises immediate and longer-term best interests converge with that of our entire nation’s economy.

Respectfully, Supposn
 

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JoG, it does not simply “duplicate the foreign exchange technology”. Foreign exchange technology does not significantly reduce if not entirely eliminate USA’s trade deficit while rather than reducing would increase our GDP more than otherwise.
Import Certificate act as an indirect but effective subsidy of USA’s exported goods.
Places a market determined “cap” upon the volumes of low wage nations’ products detriments to USA’s numbers of jobs and wage rates.
Additionally the markets still determine which imported goods the USA will or will not import; (i.e. import “allocation”).

The proposal is much more market rather than government regulated.

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

Excerpts from the 5:00 AM, May 13, 2016 of this thread:

I have confidence in private independent and competitive enterprises. But I’m opposed to our current trade policy, (or lack of policy) that puts us at economic disadvantage to low-wage nations.
I also believe that even if brokerage houses would participate in the global market of transferable certificates, a good proportion of those transactions will be internet transactions. …

[The post contains a brief but adequate description of the markets’ Import Certificates’ regulating. The market’s natural behavior regarding transferable certificates would in almost all cases be superior to whatever can be drafted and enforced by humans.]

Other than existing laws regarding fraud or counterfeiting, the transferable certificates require no special regulating by the government. The Global market for the transferable Import Certificates will be entirely market regulated.
There’s no such thing as certificate price that is too high or low.

Respectfully, Supposn

That certainly does not do anything to convince me. The currency market would be fine, if unhampered and not tampered with. Adding the certificates does nothing new, that I can see. Or do you think that they would be more immune to manipulation than the currency? And if yes, why?
 

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That certainly does not do anything to convince me. The currency market would be fine, if unhampered and not tampered with. Adding the certificates does nothing new, that I can see. Or do you think that they would be more immune to manipulation than the currency? And if yes, why?

JoG, yes, absolutely more immune.
Refer to the 5:00 AM, May13, 2016 post within this thread.

Respectfully, Supposn
 

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As near as I can glean from the Wikipedia is that the fatal flaw is that it requires honesty, transparency, proof, and accountability, not to mention administration by some "world body" of UN kleptocrats.

It is what nightmares are made of.

I say enforce patent and intellectual property laws, make subsides go away where they punish poor countries, make subsidies go away where they aren't needed.
 

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As near as I can glean from the Wikipedia is that the fatal flaw is that it requires honesty, transparency, proof, and accountability, not to mention administration by some "world body" of UN kleptocrats.

It is what nightmares are made of.

I say enforce patent and intellectual property laws, make subsides go away where they punish poor countries, make subsidies go away where they aren't needed.

ChuckieChan, you lost me?

The Import Certificate concept can only be applied to globally traded GOODS. It is inapplicable to any product or right that is not itself TAGIBLE.

What (if any) existing subsidies are you referring to?
How is your post germane to Import Certificates? Copyrights, patents, royalties are a different topic.

Respectfully, Supposn
 

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JoG, yes, absolutely more immune.
Refer to the 5:00 AM, May13, 2016 post within this thread.

Respectfully, Supposn

That does not show that it is better than currency.
 

Lafayette

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IMPORT CERTIFICATES

We know you support import certificates, there has been threads on the subject and attempts to derail other economic discussion threads to talk about this.

As I have said many-a-time, Import Certificates, permitted by GATT Article 12, states clearly that for countries suffering from specific-import challenges said certificates can be established. But, there must be a specific justification as to why, and the certificates are applicable in that industry for only a limited period of time. About GATT:
*Article XI: General Elimination of Quantitative Restrictions

1. No prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licences or other measures, shall be instituted or maintained by any contracting party on the importation of any product of the territory of any other contracting party or on the exportation or sale for export of any product destined for the territory of any other contracting party.

We cannot protect American industry from "all Chinese imported goods".

The Import Certificate was not intended for such a purpose. How more clearer can the debate get when any reading of Article 12 of the GATT agreement details the conceptual reason for Import Certificates.

OTHER IMPORT RESTRICTIONS

Here is a Good Example of what is hurting US food-exports anchored in the fact that what is permitted in the US is not necessarily permitted in importing countries. Which is the export of poultry goods from the US given that US producers sterilize poultry with bleach. In samples of US poultry, EU labs have found excessive levels of Chlorine, which is harmful to human health. It is not allowed in the processing of any meats in the EU.

Apparently, that is not the case in the US. (Yes, it is washed off, but that washing does not take all of it off, and with time the residue will build-up in your system. It is not for nothing that the US life-span is 3 years less than in Europe. There are a multiplicity of factors at play, and food-processing is likely to be one of them.)

Not even Import Certificates are going to get American poultry into the EU.

NB: The only place one is able to buy a butter-ball Turkey in Europe is on an American military-base or Switzerland.
 
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That certainly does not do anything to convince me. The currency market would be fine, if unhampered and not tampered with. Adding the certificates does nothing new, that I can see. Or do you think that they would be more immune to manipulation than the currency? And if yes, why?

Originally Posted by Supposn:
JoG, yes, absolutely more immune.
Refer to the 5:00 AM, May13, 2016 post within this thread.
Respectfully, Supposn

[Background information:
The U.S. dollar’s value is dependent upon its exchange rate within the global currency exchange markets and the U.S. Federal Reserve Board which has been entrusted with the task to regulate the value of the U.S. dollar.

I suppose that all U.S. presidents between the two World wars and those since the Second World War have stated and/or implied the value of the U.S. dollar within the global currency exchanges was being manipulated by those wishing to degrade USA’s trade or for other nefarious reasons. I am not sufficiently knowledgeable and will not comment regarding the “nuts and bolts” of currency exchanges.

Greenspan was one of the many chairmen of the U.S. Federal Reserve Board. He wrote of when he was being considered for the job. As a free market proponent he had doubts as to the effectiveness of the FRB to actually regulate the value of the U.S. dollar (and I suspect he still has those doubts). I’ve always shared his doubts and have wondered why and how over the boards many years of existence it hasn’t completely screwed up our economy? I suspect their apparent evasion of failure was due to board members really knowing what they were doing and/or no one really knew what was happening and no one did or does really understand how poorly they have done.

I suspect that the FRB’s attempts to regulate the U.S. dollar are similar to a dog that tap dances while playing the piano. The dog doesn’t do it well but the wonder is that the dog even attempt to do it.]
//////////////////////

JoG, to any extent that the FRB wrongly determines to what extent to increase or decrease our money supply, or to the extent that U.S. dollar values can and is undermined within global currency exchanges, the value of the U.S. dollar's value has been rightly or wrongly determined.

Import certificates are only issued to exporters of USA goods who request their shipments be assessed and agree to pay the fees which defray the Import certificate policy’s entire direct federal expenses or to refund any excessive import certificates surrendered to the federal government. All surrendered certificates are cancelled.

There’s never any excessive certificates issued and the cause of their issuance, (i.e. the export of USA goods) consequentially increases the value of the U.S. dollar more than otherwise.

The supply or price of transferable Import Certificates cannot be “cornered”. If the certificate prices threaten to be too high, entrepreneurs can export USA goods of marginally too high cost and sell them to foreign purchasers at some loss while realizing a net profit due to their acquisition of the high valued transferable certificates.

Also at some point USA purchasers of Imported goods may “balk” due to the certificates increase of what they’re asked to pay for imported goods. If the USA consumer decides to purchase less imported goods, the global market prices of transferable import Certificates,
the additions to import prices sold to USA purchasers and the subsidies of USA exported goods sold to foreign purchasers will all to some extent be reduced.

The point is that import certificates rather than U.S. dollars’ values are highly more sensitive to markets and highly more transparent.

Respectfully, Supposn
 
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joG

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Originally Posted by Supposn:
JoG, yes, absolutely more immune.
Refer to the 5:00 AM, May13, 2016 post within this thread.
Respectfully, Supposn

[Background information:
The U.S. dollar’s value is dependent upon its exchange rate within the global currency exchange markets and the U.S. Federal Reserve Board which has been entrusted with the task to regulate the value of the U.S. dollar.

I suppose that all U.S. presidents between the two World wars and those since the Second World War have stated and/or implied the value of the U.S. dollar within the global currency exchanges was being manipulated by those wishing to degrade USA’s trade or for other nefarious reasons. I am not sufficiently knowledgeable and will not comment regarding the “nuts and bolts” of currency exchanges.

Greenspan was one of the many chairmen of the U.S. Federal Reserve Board. He wrote of when he was being considered for the job. As a free market proponent he had doubts as to the effectiveness of the FRB to actually regulate the value of the U.S. dollar (and I suspect he still has those doubts). I’ve always shared his doubts and have wondered why and how over the boards many years of existence it hasn’t completely screwed up our economy? I suspect their apparent evasion of failure was due to board members really knowing what they were doing and/or no one really knew what was happening and no one did or does really understand how poorly they have done.

I suspect that the FRB’s attempts to regulate the U.S. dollar are similar to a dog that tap dances while playing the piano. The dog doesn’t do it well but the wonder is that the dog even attempt to do it.]
//////////////////////

JoG, to any extent that the FRB wrongly determines to what extent to increase or decrease our money supply, or to the extent that U.S. dollar values can and is undermined within global currency exchanges, the value of the U.S. dollar's value has been rightly or wrongly determined.

Import certificates are only issued to exporters of USA goods who request their shipments be assessed and agree to pay the fees which defray the Import certificate policy’s entire direct federal expenses or to refund any excessive import certificates surrendered to the federal government. All surrendered certificates are cancelled.

There’s never any excessive certificates issued and the cause of their issuance, (i.e. the export of USA goods) consequentially increases the value of the U.S. dollar more than otherwise.

The supply or price of transferable Import Certificates cannot be “cornered”. If the certificate prices threaten to be too high, entrepreneurs can export USA goods of marginally too high cost and sell them to foreign purchasers at some loss while realizing a net profit due to their acquisition of the high valued transferable certificates.

Also at some point USA purchasers of Imported goods may “balk” due to the certificates increase of what they’re asked to pay for imported goods. If the USA consumer decides to purchase less imported goods, the global market prices of transferable import Certificates,
the additions to import prices sold to USA purchasers and the subsidies of USA exported goods sold to foreign purchasers will all to some extent be reduced.

The point is that import certificates rather than U.S. dollars’ values are highly more sensitive to markets and highly more transparent.

Respectfully, Supposn

Could you translate this into an operational rule, pls:
"Import certificates are only issued to exporters of USA goods who request their shipments be assessed and agree to pay the fees which defray the Import certificate policy’s entire direct federal expenses or to refund any excessive import certificates surrendered to the federal government."
 

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Could you translate this into an operational rule, pls:
"Import certificates are only issued to exporters of USA goods who request their shipments be assessed and agree to pay the fees which defray the Import certificate policy’s entire direct federal expenses or to refund any excessive import certificates surrendered to the federal government."

JoG, within https://en.wikipedia.org/wiki/Import_certificates
The “Concept” section’s first two sentences are,
“Buffett's plan proposes creating a market for transferable import certificates, (ICs) that would represent the right to import a certain dollar amount of goods into the United States. These transferable ICs would be issued to US exporters in an amount equal to the dollar amount of the goods they export and they could only be utilized once. They could be sold or traded to importers, who must purchase them in order to legally import goods into the USA”.

If it would be necessary for the federal government to refund or adjust for excessive surrender of IC’s or government inadvertently delivered IC’s of insufficient “face values” to the exporter of USA goods”, the government could only remedy the error by issuing and delivering additional IC’s to the injured party.

IC’s can be transferred in the form of “hard” documents similar to paper currency or as electronic transfers. In the case of surrendering hard IC documents with printed “face values” the government would refund excessive payment by issuing additional ICs, similar to the manner that we normally “make change” when we participate in cash transactions.

I regret this excessively wordy post but what I suspect you meant by “operational rule” would be less meaningful unless I drafted a copy of the proposal’s entire, or almost entire “operational rules”.

Respectfully, Supposn
 

joG

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JoG, within https://en.wikipedia.org/wiki/Import_certificates
The “Concept” section’s first two sentences are,
“Buffett's plan proposes creating a market for transferable import certificates, (ICs) that would represent the right to import a certain dollar amount of goods into the United States. These transferable ICs would be issued to US exporters in an amount equal to the dollar amount of the goods they export and they could only be utilized once. They could be sold or traded to importers, who must purchase them in order to legally import goods into the USA”.

If it would be necessary for the federal government to refund or adjust for excessive surrender of IC’s or government inadvertently delivered IC’s of insufficient “face values” to the exporter of USA goods”, the government could only remedy the error by issuing and delivering additional IC’s to the injured party.

IC’s can be transferred in the form of “hard” documents similar to paper currency or as electronic transfers. In the case of surrendering hard IC documents with printed “face values” the government would refund excessive payment by issuing additional ICs, similar to the manner that we normally “make change” when we participate in cash transactions.

I regret this excessively wordy post but what I suspect you meant by “operational rule” would be less meaningful unless I drafted a copy of the proposal’s entire, or almost entire “operational rules”.

Respectfully, Supposn

It sounds like it would be a mess that guaranteed a new bureaucracy lots of jobs and opportunities for corruption without any real upside but the hope that we could balance the trade deficit, but reduce our efficiency to do so.
 

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It sounds like it would be a mess that guaranteed a new bureaucracy lots of jobs and opportunities for corruption without any real upside but the hope that we could balance the trade deficit, but reduce our efficiency to do so.

JoG, it would entail expanding and somewhat intensifying U.S. Customs task efforts to consider all shipments going through USA borders but the proposal’s self-funding.
Currently the U.S. Customs service, (a part of our Department of Home Security) is doing less than an exemplarily job of screening everything entering the USA. Additional funding and “eyes” would not hinder but would likely improve USA’s physical security.

The administrative tasks involved with the assessment of goods and the issuing, collecting and canceling surrendered Import Certificates would not materially affect our federal government’s size, or numbers of employees. It’s certainly not detrimental to the federal budget and would improve our economic and social conditions.

Respectfully, Supposn
 
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