Reduce the trade deficit; increase GDP & median wage.

[I'm Supposn]

Posted by Supposn:
USA’s trade deficit’s drags upon our domestic production are particularly reflected by drags upon employees’ earnings, (i.e. drags upon numbers of jobs, wages and wage-rates). Employees, their dependents are almost the entire USA population; they and many of our nation’s enterprises are highly sensitive to the purchasing powers of employees and their dependents.
My concern is for our population’s superior quality of life. I do not believe that can be accomplished by somehow “capping” incomes but rather by improving our median quality of life. The consequences of such achievements would be the significant improvement of life for the financially least of us.
I do not believe we can improve our quality of life if we do not improve our GDP. Annual trade deficits are immediately detrimental to their nation’s GDP.

... If you wish to improve our population's superior quality of life, then you should be against spiking their cost of living, driving down their standard of living. In the meantime, you are confusing "GDP" with "Standard/Cost of Living".

For an overly-simplified example, if you increase someone's take-home pay by 15%, but then you increase their cost of living by 30%, are they better off? Or worse off?.

CPWill, I am not confusing GDP with another word referring to any statistical description of our population’s quality of life.
My concern for the GDP is based upon the the feasibility of governments or corporations or non-profit entities including our families and ourselves to improve our population’s or our own quality of lives are to some significant extent dependent upon improving the nation’s domestic production.

Please explain your comment, "you should be against spiking their cost of living, driving down their standard of living".

Respectfully, Supposn

 

[I'm Supposn]

Posted by Supposn:
What you’re touching on is the discussion of what’s an economy’s purpose?

... Economic policies have purpose. The economic policy of protectionism, for example, has, as it's purpose, transferring money from all domestic consumers to a politically connected industry, in the context of a net loss of wealth. ...

CPWill, you’re correct; the proper words should be an “economic policy’s” rather than an “economy’s” purpose.

Regarding the proposed Import Certificate policy for USA’s global trade, it is not drafted to discriminate between enterprises, or foreign nations. If you consider importing and exporting as a single trade industry, it does not discriminate among ANY industries.
But the proposal’s certainly of some advantage to ALL USA producers or exporters of USA products that compete or aspires to compete with foreign goods within and/or beyond USA’s borders.

The proposal’s entire net direct costs are paid by USA purchasers of foreign goods rather than by “ALL domestic consumers”; such purchasers are the elementary cause of USA’s annual trade deficits.
Our current global trade policy or lack of policy is to net detriment of our nation’s economy and of particular financial detriment to USA employees. USA’s adoption of the Import certificate proposal would be of net benefit to USA employees, their dependents and any other entities such as commercial enterprises that would share some net gains due to USA employees increased purchasing powers.

What do you mean by "in the context of a net loss of wealth"?

Respectfully, Supposn

 

[cpwill]

Posted by Supposn:
Dollars that are soon returned to the USA for purchasing USA products do not contribute to USA’s trade deficit.
Posted by CPWill:
That depends on how they are spent.

CP Wills, No!

No, Yes!

Dollars returned to the USA in exchange for USA exports are positive transactions increasing USA’s balance of trade;

Depending on how they are spent - for example, foreign based businesses often have US-based subsidiaries or outlets. If profits are realized outside the United States, and then brought back within the company, and then spent by a local company on a local good, then - as I understand it - that doesn't count against our trade imbalance.

How USA enterprises spent their export sales revenues is a separate topic; we're discussing trade deficits' effects upon their nation’s economies.

:shrug: it allows them to export inflation, and increase their standard of living while decreasing its' domestic cost. The backside risk is of foreign holders of a currency eventually dumping it, which will have the reverse effect, and so we should avoid anything that would cause that.

CP Wills, yes; inflation and also interest lost.

What makes you think they are receiving no interest abroad?

Posted by Supposn:
Dollars that are returned to the USA as investments or loans to entities for their eventual functioning within the USA are of benefit to our nation to the extent that they increase and/or in the future will further increase USA’s domestic production.
Posted by CPWill:
:shrug: perhaps. They also tend to drive up domestic real estate prices in already high-priced cities.
CP Wills, Foreign investors effects upon real estate is beyond the scope of this thread’s discussion of trade deficits effects upon our economy and my particular concern of their effects upon employees’ incomes.

Interesting. So when you are measuring the impacts of employee incomes, you don't want to include a measurement of how much they have to pay for housing (a typical households' largest expense).

That makes no sense.


Again, I'll ask (you cut it off and didn't reply to it earlier), if you increase someone's take-home pay by 15%, but then you increase their cost of living by 30%, are they better off? Or worse off?.

 

[cpwill]

CP Wills, I prefer comparing trade deficits (which are a component of the GDP), with the entire GDP because they’re the same currency at the same time in the same nation and are usually compiled somewhat similar manners by somewhat related organizations.
I’m familiar with CPI’s and often compare them to legally mandated minimum wage rates. They apply same time in the same nation but they’re one is expressed as an index number and the other’s expressed as a U.S. dollar amount.

Sure. But you didn't answer the question - when measuring the impact of an economic policy, why should I care more about "how does this impact an artificial number" than I care about "how does this impact the actual lives of the people effected by it"?

I am not yet familiar with and have not considered the validity of various methods that claim to gauge populations’ qualities of life. I have considered and often used other statistical descriptions such as trade deficits, GDP, median wage, minimum wage when they can be reasonably compared to each other.

I've seen GDP-per-capita used, which always struck me as problematic. Purchasing Power Parity is a good tool.

..Using PPPs is the alternative to using market exchange rates. The actual purchasing power of any currency is the quantity of that currency needed to buy a specified unit of a good or a basket of common goods and services. PPP is determined in each country based on its relative cost of living and inflation rates. Purchasing power plus parity ultimately means equalizing the purchasing power of two differing currencies by accounting for differences in inflation rates and cost of living....

Our personal experiences confirm the logical conclusion that changes of wage and salary purchasing powers do somewhat indicate changes of our living standards.

Precisely. So, for example, if you are able to increase average take-home pay by 15%, but the cost of that is a price of living increase of 30%, then you haven't actually given them a raise in "real" terms - you've cut their standard of living.

 

[Fenton]

Kushinator, American investors and consumers have generally demonstrated unlimited greed. I'm confident they'll continue to want more.

Respectfully, Supposn

What they've demonstrated over the last 8 years is a high level of due dilligence.

Its never wise to take the reactions of investors for granted. They've demonstrated that they will spend when its in their best interest to do so and save when it the risk outweighs the reward

 

[I'm Supposn]

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.

Refer to the "Import Certificates" tread.

Respectfully, Supposn

 

[I'm Supposn]

What they've demonstrated over the last 8 years is a high level of due dilligence.

Its never wise to take the reactions of investors for granted. They've demonstrated that they will spend when its in their best interest to do so and save when it the risk outweighs the reward

Fenton, you're stating investors don't want more?

Samuel Gompers was asked, “What does labor want”? His reply in essence was “more”.

I always told my children and now tell my grandchildren that they should appreciate whatever they have but there’s nothing wrong about wanting more.
Greed itself is evil only to the extent that we ever commit evil to obtain or retain more.

Respectfully, Supposn

 

[I'm Supposn]

Sure. But you didn't answer the question - when measuring the impact of an economic policy, why should I care more about "how does this impact an artificial number" than I care about "how does this impact the actual lives of the people effected by it"?

I've seen GDP-per-capita used, which always struck me as problematic. Purchasing Power Parity is a good tool.

Precisely. So, for example, if you are able to increase average take-home pay by 15%, but the cost of that is a price of living increase of 30%, then you haven't actually given them a raise in "real" terms - you've cut their standard of living.

CPWill, economics only deals with representations as you describe to be “artificial numbers”. They’re apparently of some concern to you; you’re posting in the “Economics forum”.
I can compare prices of flowers but the differences due to species, aromas, under differing conditions are much more subjective rather than objective attributes.
I don’t understand your point.

I’m happy that “purchasing power parity” works for YOU. After reading the description of PPP I’ve concluded that I’d have more confidence in the median wage with cost-price index adjustment.
But I cannot obtain median wage data for whatever years I want. I have not yet obtained any authoritative and sufficient median-wage data. I have to make do with my own guesstimates or whatever I do find.

All such statistical data is somewhat problematic. The various species of CPI’s are all dependent upon less than objective determinations of what’s in the shopping basket upon which the CPIs are based. I have less confidence in comparisons between different national societies because USA and their baskets are or should differ. I haven’t even considered nation’s regional differences of prices and baskets within the same nations such as exist within the USA. . The determinations of those basket changes are somewhat both objective and subjective.

Respectfully, Supposn

 

[I'm Supposn]

Posted by Supposn:
Dollars returned to the USA in exchange for USA exports are positive transactions increasing USA’s balance of trade.

...Depending on how they are spent - for example, foreign based businesses often have US-based subsidiaries or outlets. If profits are realized outside the United States, and then brought back within the company, and then spent by a local company on a local good, then - as I understand it - that doesn't count against our trade imbalance. ...

CP Wills, I specified that those returned dollars were directly spent for exported USA products and thus did reduce USA’s trade deficit.

If they were returned to the USA as investments they're additions to the investment component of USA’s GDP but you are correct, they are not attributable to USA’s foreign trade.

Some economists believe that trade dificts' induced foreign investments into the USA mitigate, (they do not fully compensate) for USA’s trade deficits’ drags upon our domestic production and those drags consequential drags upon our numbers of jobs, total wages and wage-rates.

Others contend that if that were true, those additional foreign investments would have induced additional exports to greatly reduce if not eliminate our more current trade deficits; that has not happened.

We all in the USA benefit from cheaper imports but they do not compensate for the net detriment to USA employees. USA employees, their dependents and the many enterprises revenue’s that are highly sensitive to USA’s wage incomes and rates are critical to USA’s economy.

Foreign investment due to our trade deficit is not economically superior to domestic sources of investments.
Commercial investment into the USA is increased when our economy's robust and reduced when we are doing more poorly. When the economy's down, all investors seek better opportunities elsewhere or "park" their wealth in safe havens such as U.S. Treasury notes.

Foreign investment due to our trade deficit is not economically superior to domestic sources of investments. More domestic investment sources of investments due to a more robust USA economy are preferable to investments due to USA's trade deficits that are net detrimental to our economy.



Excerpts from the 5:58 AM, May 10, 2016 post:

Dollars that are returned to the USA as investments or loans to entities for their eventual functioning within the USA are of benefit to our nation to the extent that they increase and/or in the future will further increase USA’s domestic production. There’s some loss of economic benefit if those dollars are invested or loaned later rather than sooner.

Dollars that are returned to the USA as investments or loans to entities for their functioning beyond USA’s borders are of course beneficial to the entities and/or the entities’ owners that received the wealth loaned or invested, but they contribute little or nothing to current or future USA’s GDPs.

Respectfully, Supposn

 

[Fenton]

Fenton, you're stating investors don't want more?

Samuel Gompers was asked, “What does labor want”? His reply in essence was “more”.

I always told my children and now tell my grandchildren that they should appreciate whatever they have but there’s nothing wrong about wanting more.
Greed itself is evil only to the extent that we ever commit evil to obtain or retain more.

Respectfully, Supposn

Im saying investors do their due diligence before risking their principle, if they're intelligent investors that is

Over the last 8 years they've chosen to save and or invest in a equities market propped up by unprecedented Monetary stimulus rather than risk their principle in the US economy

Investors and markets respond to incentivizes by spending and react to poor policy decisions by saving or moving their money offshore

There are plenty of other investment alternatives that dont include the US economy and its easier than ever to exploit those alternatives

Dont believe me ? Look at how tax and regulatory polices affect investment on a State and local level.

California and Texas are both border US States with comparable populations. Thats where the similarities stop.

California has decided to apply Liberal tax and regulatory policies that include but are not limited to raising taxes on top earners and local Bussinesses.

Texas applies Conservative economic principles that include no State income tax, tax incentives for bussiness and reasonable regulations

Texas has led the Nation for the last 7 years in new job creation, has a multi-billion dollar surplus and is the chosen destination for Millions of Americans and thousands of Bussinesses who decided to look elsewhere for opportunities

California has lost thousands of Bussinesses and large amounts of tax paying residents due to their policies that disencitivize new investment which include but are not limited to tax increases.

They currently have the highest level of unfunded pension liabilities in the Nation too.

Do investors want more ? Sure they do, but not at the risk of losing their principle.

 

[I'm Supposn]

No, Yes!


Depending on how they are spent - for example, foreign based businesses often have US-based subsidiaries or outlets. If profits are realized outside the United States, and then brought back within the company, and then spent by a local company on a local good, then - as I understand it - that doesn't count against our trade imbalance.

:shrug: it allows them to export inflation, and increase their standard of living while decreasing its' domestic cost. The backside risk is of foreign holders of a currency eventually dumping it, which will have the reverse effect, and so we should avoid anything that would cause that.

What makes you think they are receiving no interest abroad?

Interesting. So when you are measuring the impacts of employee incomes, you don't want to include a measurement of how much they have to pay for housing (a typical households' largest expense).

That makes no sense.

Again, I'll ask (you cut it off and didn't reply to it earlier), if you increase someone's take-home pay by 15%, but then you increase their cost of living by 30%, are they better off? Or worse off?.

CP Will, how entities within the USA spent foreign sources of wealth commingled their other wealth sources is germane to this discussion of USA’s global trade balance’s affect upon our economy only to the extent that such wealth may have been later spent to import foreign products into the USA.

Specifically, foreign investment into USA real estate has little or no significant effect upon middle income and low-income residential housing.

There is a general consensus among economists that cheap foreign imports somewhat reduce losses of the U.S. dollar’s purchasing power but they also generally agree that USA’s trade deficit’s reduce the U.S. dollar’s value within currency exchange markets and thus consequentially reduce the U.S. dollar’s purchasing power.

Other than any USA’s balance of trades’ affects upon USA’s economy, other factors affecting U.S. dollar’s purchasing power is not germane to this discussion.

I’m among those that contend USA's annual trade deficits are clearly of net detriment to our economy.

Respectfully, Supposn

 

[Lafayette]

Trade deficits’ are ALWAYS detrimental to their nations’ GDPs and the detriments are leveraged; they’re significantly larger than the deficits themselves.

The basic concept is for exporters who choose to pay the federal fees to acquire TRANSFERABLE IMPORT CERTIFICATES, (ICs) for the assessed value of their goods leaving the USA. Importers would be required to surrender ICs for the assessed value of their goods entering the USA. Surrendered certificates are cancelled.

Aint gonna work, as I've argued before on this forum. You are myopic to think that a non-unilateral trade-measure will be accepted by our trading partners without a whimper.

The idea therefore is NOT commonly bilateral, since it will never be agreed upon by the members of the WTO. Therefore, for all such "import taxes", equivalent "import taxes" upon American exports would be placed. The consequence of which would be to impose yet another trade-barrier reducing international commerce.

Which nobody in a recessive global-economy wants nowadays ...
______________________________

 

[I'm Supposn]

Aint gonna work, as I've argued before on this forum. You are myopic to think that a non-unilateral trade-measure will be accepted by our trading partners without a whimper.

The idea therefore is NOT commonly bilateral, since it will never be agreed upon by the members of the WTO. Therefore, for all such "import taxes", equivalent "import taxes" upon American exports would be placed. The consequence of which would be to impose yet another trade-barrier reducing international commerce.

Which nobody in a recessive global-economy wants nowadays ...
______________________________

Lafayette, it’s a UNILATERAL policy drafted to USA’s advantage REGARDLESS of whatever mischief the remainder of the world contrives.
The USA has no trade treaties. NAFTA and USA’s all other international trade agreements are executive-congressional agreements or executive orders that are all subject to unilateral modification and/or termination.

I’m opposed to nation’s attempting to intervene within the domestic affairs of other sovereign nations. When it does succeed, it’s usually a case of a large powerful nation practicing extortion upon a smaller weaker nation. Sovereign nation generally should have supreme command of their own borders. What they do or do not permit to pass through their own borders is a domestic issue. We should refrain from unnecessarily compromising our own sovereignty.

Refer to http://www.debatepolitics.com/econo...national-trade-agreements.html#post1065872483

Respectfully, Supposn