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USA goods could compete with marginally under-priced products of low-wage nations.

I'm Supposn

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USA goods could compete with marginally under-priced products of low-wage nations.

The proposed transferable Import Certificate for USA’s global trade would enable USA goods to compete with many marginally under-priced products of low-wage nations.
The certificates’ global open market prices per U.S. dollar of face values determine the extent of the policies almost direct effect upon prices of foreign goods sold to USA purchasers and the indirect subsidy effect upon prices of USA products sold to foreign purchasers.

USA exporters that request their goods to be assessed must also agree to pay the federal fees that are intended to defray entire federal direct expenses due to the USA unilateral substantially market driven Import Certificate policy. Exporters of USA goods would be motivated to profit from acquiring the valuable transferable certificates that are issued by the U.S. Treasury Department.
The U.S. Congressional Budget Office would annually monitor and advise congress as to the fee rate per assessed dollar value that would be appropriate to defray all direct federal expenditures due to the Import Certificate policy.

//////////////////////////////////////
Certificates expected price behavior in global competitive markets:

The federal fees are passed onto USA purchasers of foreign goods and that’s the reasonably expected minimum rate of the certificates’ global prices.
If USA consumers balk at paying any more for foreign goods, that would limit the maximum rate of certificates’ global prices.

If the certificates’ global price rates should be insufficient, exporters of USA goods would not trouble to deal with them and fewer certificates will be issued.
If issued certificates do not satisfy USA consumers effective demands for foreign goods, the shortfall would increase the global certificate markets' rates prices. But additionally the law could be drafted as to provide for congressional executive agreements to interrupt the enactment of this trade policy because there are no longer any reasonable expectations for chronic annual USA trade deficits. The Import Certificate laws and regulations can still remain “on the books”.

Refer to Wikipedia’s article entitled “Import Certificates”
And
To the paragraphs entitled “Trade Balances' effects upon their nation’s GDP” within Wikipedia's article “Balance of trade”.

Respectfully Supposn
 

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Re: USA goods could compete with marginally under-priced products of low-wage nations

USA goods could compete with marginally under-priced products of low-wage nations.
You mean if you put tariff tax on already overtaxed American consumers at the point of a gun, protected and crippled American industry, and didn't start a trade war that led to a real war. You have a really great idea there!!!
 

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Re: USA goods could compete with marginally under-priced products of low-wage nations

I did not vote for Donald Trump in 20016 and I’m very much unlikely to do so in 20020; BUT if during his administration, he signs and enacts an “Import Certificate” policy as described in Wikipedia’s article entitled “Import Certificates” or he strived to have such a bill passed and runs on a platform to sign such a bill, it’s extremely likely I’d vote for President Donald Trump in 2020.

That bill would effectively eliminate USA’s annual trade deficits of goods, and more than otherwise increase our GDP, numbers of jobs and median wage. Rather than being a net source of tax revenue, the policy behaves as an indirect but effective subsidy of prices to foreign purchasers of USA exported goods.
All the trade policy’s net direct costs are passed on to USA purchasers of imported goods. The substantially market (rather than government) driven trade policy could not halt the importation of any item for which there’s an effective demand among USA consumers of goods.

Respectfully, Supposn
 

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Re: USA goods could compete with marginally under-priced products of low-wage nations

That bill would effectively eliminate USA’s annual trade deficits of goods,

any govt can make a trade deficit illegal by raising the price of imports until Americans can no longer afford to buy them. But then American consumers would be stuck buying American made junk at an even higher price. Its a perfectly liberal formula to impoverish Americans.
 

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Re: USA goods could compete with marginally under-priced products of low-wage nations

any govt can make a trade deficit illegal by raising the price of imports until Americans can no longer afford to buy them. But then American consumers would be stuck buying American made junk at an even higher price. Its a perfectly liberal formula to impoverish Americans.

James972, I’m supposing that you’re referring to a tariff policy. It’s conceivable that a tariff policy could eliminate USA’s annual trade deficits of goods but to do the federal tariff rate would need to be drastically high and could very well effectively eliminate all USA’s imports.

Within the proposal as described by Wikipedia’s “Import Certificates” article, the rate of price increases of imports within USA domestic markets, beyond federal government’s direct expenditures for administration and value assessment tasks, are market (rather than government determined).
This market determined portion of Import’s price increase rates’ also serve as an indirect but effective price subsidy of USA exported goods to foreign purchasers.

Regardless of the additional price increases to USA purchasers of imports, USA’s chronic annual trade deficits of goods would be eliminated or almost eliminated. This would be true even if the additional, prices were only pennies per transactions. The policy could not and would not prevent any item from being imported into the USA if there’s effective USA demand for that item.

Refer to http://www.debatepolitics.com/econo...ariffs-and-import-certificate-policies-3.html

Respectfully, Supposn
 
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Re: USA goods could compete with marginally under-priced products of low-wage nations

any govt can make a trade deficit illegal by raising the price of imports until Americans can no longer afford to buy them. But then American consumers would be stuck buying American made junk at an even higher price.

Holy crap, you just posted something that actually made a salient point! But then ...

Its a perfectly liberal formula to impoverish Americans.

... you ruined it with your usual partisan hackery.
 

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Re: USA goods could compete with marginally under-priced products of low-wage nations

James972, I’m supposing that you’re referring to a tariff policy. It’s conceivable that a tariff policy could eliminate USA’s annual trade deficits of goods but to do the federal tariff rate would need to be drastically high and could very well effectively eliminate all USA’s imports.

Within the proposal as described by Wikipedia’s “Import Certificates” article, the rate of price increases of imports within USA domestic markets, beyond federal government’s direct expenditures for administration and value assessment tasks, are market (rather than government determined).
This market determined portion of Import’s price increase rates’ also serve as an indirect but effective price subsidy of USA exported goods to foreign purchasers.

Regardless of the additional price increases to USA purchasers of imports, USA’s chronic annual trade deficits of goods would be eliminated or almost eliminated. This would be true even if the additional, prices were only pennies per transactions. The policy could not and would not prevent any item from being imported into the USA if there’s effective USA demand for that item.

Refer to http://www.debatepolitics.com/econo...ariffs-and-import-certificate-policies-3.html

Respectfully, Supposn

Of course if import prices are market driven then we have free trade, not import certificate tariff taxes to impoverish Americans.
 

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Re: USA goods could compete with marginally under-priced products of low-wage nations

Of course if import prices are market driven then we have free trade, not import certificate tariff taxes to impoverish Americans.

James972, your preference is USA’s seeking of ‘pure’ Free trade rather than Import Certificates policies’ consequential increase of our GDP and numbers of jobs (more than otherwise)? You describe these consequences as impoverishing Americans, or your more amiable to accepting Import Certificate policy because it's substantially more market rather than government driven?

Respectfully, Supposn
 
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Re: USA goods could compete with marginally under-priced products of low-wage nations

James972, your preference is USA’s seeking of ‘pure’ Free trade rather than Import Certificates policies’ consequential increase of our GDP and numbers of jobs (more than otherwise)? You describe these consequences as impoverishing Americans, or your more amiable to accepting Import Certificate policy because it's substantially more market rather than government driven?

Respectfully, Supposn

the more you restrict free trade the poorer people get. Imagine if you had to make everything yourself? Imagine if your city had to make everything itself??
 

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Re: USA goods could compete with marginally under-priced products of low-wage nations

the more you restrict free trade the poorer people get. Imagine if you had to make everything yourself? Imagine if your city had to make everything itself??

This is a rather good point. If we take protectionism and continue to deduce it to states or cities, such that Illinois has less gross state product and employment because it imports steel, sand, and transportation services from Indiana. We can deduce the reasoning even further, and apply it to individual cities, who lose out on valuable production when citizens/businesses work/invest outside of their respective cities. In fact, we would all be better off if we produced and serviced everything we need on an individual level!

Upside-Down_Face_Emoji.png
 

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Re: USA goods could compete with marginally under-priced products of low-wage nations

This is a rather good point. If we take protectionism and continue to deduce it to states or cities, such that Illinois has less gross state product and employment because it imports steel, sand, and transportation services from Indiana. We can deduce the reasoning even further, and apply it to individual cities, who lose out on valuable production when citizens/businesses work/invest outside of their respective cities. In fact, we would all be better off if we produced and serviced everything we need on an individual level!

You'll never be rich until you are a subsistence farmer! Think about how employed you will be!!!!
 

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Re: USA goods could compete with marginally under-priced products of low-wage nations

the more you restrict free trade the poorer people get. Imagine if you had to make everything yourself? Imagine if your city had to make everything itself??

James972, the Import Certificate policy does favor its own nation among all other nations. You’re attributing false purposes and consequences to this trade policy. Its purpose and its consequences is not to eliminate its nation’s global trade nor would it do so.

It promotes its nation’s domestic production of goods and there by promotes the investing and the creation of jobs that are devoted to the such production of goods. It doesn’t favor or disfavor any type of goods; treating the production of electronic or agricultural or animal husbandry products all equally.

Import Certificate policy is substantially more market rather than government driven. If within an Import Certificate policy nation there’s an effective demand for any foreign produced item, the proposed trade policy could not and would not prevent that item from being imported into that nation.

Respectfully, Supposn
 

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Re: USA goods could compete with marginally under-priced products of low-wage nations

This is a rather good point. If we take protectionism and continue to deduce it to states or cities, such that Illinois has less gross state product and employment because it imports steel, sand, and transportation services from Indiana. We can deduce the reasoning even further, and apply it to individual cities, who lose out on valuable production when citizens/businesses work/invest outside of their respective cities. In fact, we would all be better off if we produced and serviced everything we need on an individual level!

Kushinator, regarding USA's interstate commerce and its analogy to our global trade policies:

delegates from the various American states and commonwealths attending the USA’s constitutional convention of 1787 were very much aware of some among them represented constituencies that were or would likely be at competitive commercial advantage to those represented by other delegates.

Despite their allegiances to competing governments, they managed to compromise among themselves and support a federal government. They risked their personal and political reputations which must have to some extent risked their individual finances, for what they hoped would prove to be of mutual net benefit to all in our then new nation.

[Their behavior contrasts with the congresses during President Obama’s administration when federal representatives and senators ordinarily voted contrary to what they previously had contended was to our nation’s best interests, because they preferred to delay or hinder our nation’s progress rather than permit any improvement of our nation to be attributed to a person or a political party they believed to be unworthy of occupying the White House.
I hope this despicable precedent will not be continued under President Donald Trump’s administration].

If you believe that USA states are not now as they were then in competitive commercial competition, you’re mistaken. The justification of our constitution’s granting supreme jurisdiction of interstate and international commerce to our federal government was due to the realization that our states and regions are naturally in commercial and economic competition with each other and federal supreme jurisdiction was and remains to our aggregate nation’s net best interests.

My allegiance to the USA, (i.e. my nation) is not secondary to consideration for any other concept of a regional or global entities. I’m not amiable to improving USA’s foreign relations by compromising USA’s best economic interests, and particularly compromising the financial interests of USA employees, their dependents, and all enterprises to the extent of their net benefits due to improved financial conditions of USA’s middle income earners.

Respectfully, Supposn
 
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Kushinator

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Re: USA goods could compete with marginally under-priced products of low-wage nations

Kushinator, regarding USA's interstate commerce and its analogy to our global trade policies:

delegates from the various American states and commonwealths attending the USA’s constitutional convention of 1787 were very much aware of some among them represented constituencies that were or would likely be at competitive commercial advantage to those represented by other delegates.

Despite their allegiances to competing governments, they managed to compromise among themselves and support a federal government. They risked their personal and political reputations which must have to some extent risked their individual finances, for what they hoped would prove to be of mutual net benefit to all in our then new nation.

[Their behavior contrasts with the congresses during President Obama’s administration where federal representatives and senators ordinarily voted contrary to what they previously had contended was to our nation’s best interests, because they preferred to delay or hinder our nation’s progress rather than permit any improvement of our nation to be attributed to a person or a political party they believed to be unworthy of occupying the White House.
I hope this despicable precedent will not be continued under President Donald Trump’s administration].

If you believe that USA states are not now as they were then in competitive commercial competition, you’re mistaken. The justification of our constitution’s granting supreme jurisdiction of interstate and international commerce to our federal government was due to the realization that our states and regions are naturally in commercial and economic competition with each other and federal supreme jurisdiction was and remains to our aggregate nation’s net best interests.

My allegiance to the USA, (i.e. my nation) is not secondary to consideration for any other concept of a regional or global entities. I’m not amiable to improving USA’s foreign relations by compromising USA’s best economic interests, and particularly compromising the financial interests of USA employees, their dependents, and all enterprises to the extent of their net benefits due to improved financial conditions of USA’s middle income earners.

Respectfully, Supposn

The deductive analysis was just an exercise to exemplify how poorly the logical reasoning is applied for supporters for protectionist.

Protectionism reduces trade, and with it aggregate production and standard of living. If you really cared about the American public, you wouldn't continue to push such nonsense under the guise of nationalism. Trade isn't a zero sum game. State commerce would behave as you prescribe for U.S. trade policy if this were the case. We all benefit from trade, just not in the same instances (employment/prices/availability/choice).
 
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Re: USA goods could compete with marginally under-priced products of low-wage nations

The deductive analysis was just an exercise to exemplify how poorly the logical reasoning is applied for supporters for protectionist.

Protectionism reduces trade, and with it aggregate production and standard of living. If you really cared about the American public, you wouldn't continue to push such nonsense under the guise of nationalism. Trade isn't a zero sum game. State commerce would behave as you prescribe for U.S. trade policy if this were the case. We all benefit from trade, just not in the same instances (employment/prices/availability/choice).

Kushinator, your post doesn’t offer any logical and/or specific and/or explicit argument contrary to the concept of the proposed Import Certificate policy for USA’s global trade.

Refer to Wikipedia’s Import Certificates” for an explicit description of the proposal.
Respectfully, Supposn
 

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Re: USA goods could compete with marginally under-priced products of low-wage nations

Kushinator, your post doesn’t offer any logical and/or specific and/or explicit argument contrary to the concept of the proposed Import Certificate policy for USA’s global trade.

Refer to Wikipedia’s Import Certificates” for an explicit description of the proposal.
Respectfully, Supposn

Supposn,

Your posts are the same every time you create a thread. A trade deficit is not always detrimental to GDP, nor is a trade deficit detrimental to U.S. production. Refer to a plethora of international trade literature, or the economics behind trade theory. I'm sure there are wikipedia articles, and i am sure you've been made aware of this for many years now.

Kush

p.s.

My logical rebuttal was provided initially, which you failed to address.
 

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Re: USA goods could compete with marginally under-priced products of low-wage nations

Supposn,

Your posts are the same every time you create a thread. A trade deficit is not always detrimental to GDP, nor is a trade deficit detrimental to U.S. production. Refer to a plethora of international trade literature, or the economics behind trade theory. I'm sure there are wikipedia articles, and i am sure you've been made aware of this for many years now.

Kush

p.s.
My logical rebuttal was provided initially, which you failed to address.

Kushinator, there are other economic issues that interest me but I do dwell upon the concept of this little-known Import Certificate policy. I’m highly confident if this policy's concept should ever be more widely known, it’s superiority to pure free trade or to tariffs would be more recognized.

It effectively eliminates or almost eliminates USA’s annual trade deficits of goods and is net beneficial to our GDP and numbers of jobs.

Its entire net costs are passed on to USA purchasers of imported goods and although no portion of those increases are due to or devoted to subsidizing USA exports, any portion of those increases that are beyond federal gross direct expenditures, serve as an indirect but effective price subsidy of such goods sold to foreign purchasers.

It’s not detrimental to annual federal budgets or compromises federal credit. It does not divert net federal funds from any other purposes.

My 10:25 PM, December 15, 2016 post responded to your initial post within this thread. Which specific post were you referring to when you wrote of your “logical rebuttal”?

Respectfully, Supposn
 

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Re: USA goods could compete with marginally under-priced products of low-wage nations

Xelor, many, if not most of your statements I've quoted above are fully or substantially incorrect. You are partially correct that within the Import Certificate, (IC) policy, U.S. consumers will have more items of U.S. goods available to them and they will purchase more of such goods.

The IC policy is substantially market rather than government driven. If there's effective demand for any foreign product, The IC policy could not prevent that item from being imported into the USA. Within IC policy, normal market behaviors also reduce prices paid for USA's exports which hopefully will promotes our export volumes.
Regardless of other nations' reactions to a USA import Certificate policy, our GDP and numbers of jobs will increase more than otherwise. Your analysis of Import Certificate policy is faulty.

I appreciate your desire to keep this thread on topic. If you wish, I'd be please to continue discussing the pro's and cons of “Import Certificates” comparison to tariffs or to pure free trade policies within the threads,
https://www.debatepolitics.com/econ...ariffs-and-import-certificate-policies-3.html
or
https://www.debatepolitics.com/econ...under-priced-products-low-wage-nations-2.html

Respectfully, Supposn[/QUOTE]

I appreciate your desire to keep this thread on topic. If you wish, I'd be please to continue discussing the pro's and cons of “Import Certificates” comparison to tariffs or to pure free trade policies within the threads,
https://www.debatepolitics.com/econ...ariffs-and-import-certificate-policies-3.html
or
https://www.debatepolitics.com/econ...under-priced-products-low-wage-nations-2.html

Respectfully, Supposn
I don't wish to continue discussing IC's with you. Why would I ?
  • You don't read the content I reference to support my remarks: Buffett proposed his IC idea in 2003. In about 2008/-9 Papadimitriou and Zezza performed a full-on analysis of Buffett's idea, yesterday, I paraphrased some points from their analysis, and provided a link to that analysis, and your response to it, is to baldly declare their analysis (not mine, I merely summarized it) " fully or substantially incorrect"
  • You misrepresent my remarks: I wrote "buy proportionately more U.S. made goods" which you decided to convert into simply "will purchase more [U.S.] goods."
Given both those disingenuous behaviors, no, I haven't a desire to continue with you a conversation on a technical economics topic .
 

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Re: USA goods could compete with marginally under-priced products of low-wage nations

I don't wish to continue discussing IC's with you. Why would I ?
  • You don't read the content I reference to support my remarks: Buffett proposed his IC idea in 2003. In about 2008/-9 Papadimitriou and Zezza performed a full-on analysis of Buffett's idea, yesterday, I paraphrased some points from their analysis, and provided a link to that analysis, and your response to it, is to baldly declare their analysis (not mine, I merely summarized it) " fully or substantially incorrect"
  • You misrepresent my remarks: I wrote "buy proportionately more U.S. made goods" which you decided to convert into simply "will purchase more [U.S.] goods."
Given both those disingenuous behaviors, no, I haven't a desire to continue with you a conversation on a technical economics topic .
Xelor, I haven't yet read your http://www.levyinstitute.org/pubs/wp_538.pdf link because we haven't yet began deeper discussions of the Import Certificate proposal.

I regret you believe me to be ingenious. Since I'm (thus far) convinced that the Import Certificates proposal would increase USA's GDP more than otherwise, I believe, and I mistakenly thought you concurred that USA consumers would proportionally purchase more USA goods, and spend more adjusted, or unadjusted U.S. Dollars. I (perceived no difference between using the word ”proportional” or the word “more”.

Your link discusses (I suppose) the proposed Balanced Trade Restoration Act of 2006 that was based upon Warren Buffett's and Carol Loomis's Fortune magazine article.

I'm a proponent of the proposal described within Wikipedia's “Import Certificates” article which net costs are passed onto USA's purchasers of imported goods. I believe that's the both the politically and economically best funding method. I'm opposed to it being eventually paid for by our government.

Wikipedia's proposal's not applicable to the values of specific precious or scarce mineral materials integral to products passing through USA's borders. Permitting the proposal to be applicable to precious or scarce minerals is both economically unsound and would seriously undermine the proposal's purpose.

I haven't yet considered if and how these differences may have affected the Levy Institute's conclusions.

Respectfully, Supposn
 

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Re: USA goods could compete with marginally under-priced products of low-wage nations

Part I
My response to your post quoted below is spread over four posts, mainly because I've written it the same conversational style I use to speak to people in person (this post is literally being dictated) and I just don't feel like editing it. This is the first post.

Xelor, I haven't yet read your http://www.levyinstitute.org/pubs/wp_538.pdf link because we haven't yet began deeper discussions of the Import Certificate proposal.
Frankly, it's not clear to me what the nature of our discussion has to do with it; the IC idea captures your interest, so I'd think you'd have consumed the content found at the Wiki entry you referenced. (That paper is the third external reference listed on the Wiki page.) The only reason I read it is because it's there.

Upon seeing your post, I very vaguely recalled having ages ago read about Buffett's proposal, but I had to read the Wiki and the linked content (and search for additional information) in order to "get up to speed" to have a discussion about it. I did because I really don't care to engage in discussions about which I'm not as well informed as one might be from having conducted an high level literature review of it.


I'm (thus far) convinced that the Import Certificates proposal would increase USA's GDP more than otherwise.
Then I suggest you read Papadimitriou et al's paper to which I referred/linked. You should probably read Bhandari's description of his trade equilibrium alternative approach to Buffett's proposal and his high level propositional (rather than empirical) comparison and contrast of his idea and Buffets. (the compare/contrast is also linked in the Wiki article, but his original exposition is not; you'll find it at the link in the preceding sentence.)


Buffett's idea was novel and innovative at the time he proposed it. That it was so catalyzed researchers, Papadimitriou et al, to explore its potential. They did and they published the results of their analysis. Among their findings is that Buffett's proposal would likely not produce a long-term net gain in GDP. Implementing will accomplish other outcomes that, on a normative basis, some may find desirable, but achieving those outcomes will likely result in lower GDP than were Buffett's proposal not implemented. FWIW, Papadimitriou et al in their paper submit their own alternative to (modification of) "Buffett." Their research indicated that their proposal, like "Buffett," would likely result in lower GDP than were it not implemented.

What Buffett's, Papadimitriou et al's and Bhandari's proposals all do is dramatically reduce the current account deficit.

I looked to see whether other researchers evaluated Buffett's proposal. I could not find any who did. Be that as it may, reading the Fortune article Buffett penned, one finds that the content published in 2016 is the same idea Buffett posited in 2003 and that Papadimitriou et al analyzed. What's materially different between 2003 and 2016 are (1) the general public's attention to trade issues and (2) awareness of the extent of the general public's appetite for protectionist economic policies. That awareness accrued largely to Trump's ascendance and rhetoric paired with fear/recognition that the Information Age and its impacts, as well as the nature of opportunities it presents, has made anachronisms of a noteworthy share of the populace.

 
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Re: USA goods could compete with marginally under-priced products of low-wage nations

Part II

I mistakenly thought you concurred that USA consumers would proportionally purchase more USA goods, and spend more adjusted, or unadjusted U.S. Dollars. I (perceived no difference between using the word ”proportional” or the word “more”.
Okay.

Do you now understand the difference between "proportionally more" and "more" with regard to the dual context of effective demand and import certificates? If not, just say so and I'll explain it.

(Note: If you click the link in the preceding paragraph, be aware that in economics "willingness and ability" is evidenced only by action. Thus economically speaking, a person who is "willing and able" to demand a good/service does indeed buy it. Willing or able but not actually making the purchase (demanding the good/service) is referred to as "latent demand.")


Your link discusses (I suppose) the proposed Balanced Trade Restoration Act of 2006 that was based upon Warren Buffett's and Carol Loomis's Fortune magazine article.
It explicitly and comprehensively analyzes Buffett's proposal.


I'm a proponent of the proposal described within Wikipedia's “Import Certificates” article which net costs are passed onto USA's purchasers of imported goods. I believe that's the both the politically and economically best funding method. I'm opposed to it being eventually paid for by our government.
That was clear from your earlier remarks.

I mistakenly thought you concurred that USA consumers would proportionally purchase more USA goods, and spend more adjusted, or unadjusted U.S. Dollars. I (perceived no difference between using the word ”proportional” or the word “more”.
Okay.

Do you now understand the difference between "proportionally more" and "more" with regard to the dual context of effective demand and import certificates? If not, just say so and I'll explain it.

(Note: If you click the link in the preceding paragraph, be aware that in economics "willingness and ability" is evidenced only by action. Thus economically speaking, a person who is "willing and able" to demand a good/service does indeed buy it. Willing or able but not actually making the purchase (demanding the good/service) is referred to as "latent demand.")


Your link discusses (I suppose) the proposed Balanced Trade Restoration Act of 2006 that was based upon Warren Buffett's and Carol Loomis's Fortune magazine article.
It explicitly and comprehensively analyzes Buffett's proposal.


I'm a proponent of the proposal described within Wikipedia's “Import Certificates” article which net costs are passed onto USA's purchasers of imported goods. I believe that's the both the politically and economically best funding method. I'm opposed to it being eventually paid for by our government.
That was clear from your earlier remarks.

I'm a proponent of the proposal described within Wikipedia's “Import Certificates” article which net costs are passed onto USA's purchasers of imported goods. I believe that's the both the politically and economically best funding method. I'm opposed to it being eventually paid for by our government.
Bold text --> I'm not sure what you mean.
· The net costs of what?
o Do you mean the cost of the certificates themselves?
o Do you mean the costs to the economy of matching M to X via a quota?
· Are you referring to the relative share of burden borne by consumers and producers of goods (consumer and producer surplus)?
· Are you talking about how import certificates may shift demand and potentially alter elasticity of demand and its relationship with consumer/producer surplus because while that's measurable, it's not controllable.
 

Xelor

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Re: USA goods could compete with marginally under-priced products of low-wage nations

Part III

Other:
It's not clear to me that you (nor the Wiki entry's author) realize that the proposal you favor is a quota. I'm uncertain of that because you have not (and the Wiki writer has not) produced a speck of empirical analysis that shows how the proposal overcomes the basic shortcomings of quotas. Of course, if insouciance toward those shortcomings is a predicate to the import certificate proposal, then one doesn't, as a matter argument, show how they overcome those demerits; however, applying such a predicate necessarily exposes the argument favoring the certificates to very strong refutation of them on merit, that of the net diminution of net economic welfare.

Knowing that is why I posted the quota videos and high level quota exposition I did. Papadimitriou et al, Buffett and Bhandari all have in place that predicate. I understand that they do, and accord them the right to do. That said, I'm a profit maximizing economic empiricist not normativist, by which I mean if "the numbers" attendant to empirical analysis of a proposal, that is, the conclusion about its impacts, don't show greater economic profit than leaving things alone (or as they are if things aren't already entirely devoid of economic policy burdens), I won't cotton to it.

Fundamentally, exchange will produce winners and losers, and varying degrees of each. That it will doesn't bother me in the least with regard to choosing among various economic policy options. About the only economically normative statement I'd make is that, economic policies should be chosen solely on their empirical merits, and the downsides of those policies should be resolved via other means. I don't object to resolving the downsides that are resolvable; I just wouldn't do it using economic impositions on free trade.
 

Xelor

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Re: USA goods could compete with marginally under-priced products of low-wage nations

Part IV

I'm a proponent of the proposal described within Wikipedia's “Import Certificates” article which net costs are passed onto USA's purchasers of imported goods. I believe that's the both the politically and economically best funding method. I'm opposed to it being eventually paid for by our government.
Bold text --> As you may have inferred from reading my above expressed uncertainty of your meaning, I am again unclear about what you mean.

  • Funding what?
  • What "it?"
I suspect here you mean the creation and distribution of the certificates themselves and the processes of doing so. To the extent that is what you mean....

The import certificates are little more than a means to an end, they are not the end or an end. As noted above and in my prior post the Buffet proposal is nothing other than a quota. It happens to be a variable rather than static quota, but it's a quota all the same. (If you haven't yet watched one of the quota videos, you may want to do so now for the following won't make sense to you if you don't have a keen understanding of quotas.)

  • Static quota --> X quantity or X dollar-value of goods can be imported.
  • Variable quota --> The quantity/dollar-value of goods that can be imported is a function of something. In "Buffet," it's a function of the value of goods exported; thus the more of our stuff that foreign consumers purchase (technically speaking, import into their country; whether the final consumer, rather than intermediate consumers, purchase the goods isn't relevant), the more of their stuff we'll allow their nation's (or nations') producers to export to the U.S.
The certificates merely (1) allow for tracking and (2) quantifiably establish a privilege to import goods into the U.S. Ancillary to those primary purposes the certificates can be used to create a new market, the market for the certificates themselves. Put another way, the market in which people/firms purchase the privilege to import goods into the U.S.

If you watched either of the quota videosI posted earlier, you'll recall that tariffs and quotas are the same things. Insofar as they are, it likely occurs to you that the notion of purchasing a privilege to import has exactly the same economic substance as an exemption/exception from being subject to a tariff. The only difference between them is tactical.

  • Quota: In theory, anyone can purchase the certificates, and in practice anyone might indeed do so.
    Tariff: In neither theory nor practice can or will anyone negotiate for tariff exemptions, let alone do so and receive them. The reason has to do not so much with economics, but with politics.
  • Quota: A secondary market for the certificates can be created. That market can be a private sector one like the Merc or NASDAQ or a governmental one like that for T-bills.
    Tariff: There is no secondary market, per se; however, prospective importers can be persuaded to provide certain concessions in exchange for tariff exemptions. The concessions are usually provided to the private sector.
    • E.g: --> In exchange for our not levying a tariff (or for levying a lower tariff), you must commit to building a factory in the U.S. that exports its products and sells them domestically, exempting our producers from your tariffs, give us a lease of "such and such" land onto which we'll build a military base, increase your intake of refugees from ABC, and so on....the terms of such an exchange can be literally anything (or nothing). (At the end of the day, just about anything and everything is negotiable. That's doubly so at the level of economy-wide tariffs and quotas.)
 

I'm Supposn

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Re: USA goods could compete with marginally under-priced products of low-wage nations

... Your link discusses (I suppose) the proposed Balanced Trade Restoration Act of 2006 that was based upon Warren Buffett's and Carol Loomis's Fortune magazine article.

I'm a proponent of the proposal described within Wikipedia's “Import Certificates” article which net costs are passed onto USA's purchasers of imported goods. I believe that's the both the politically and economically best funding method. I'm opposed to it being eventually paid for by our government.

Wikipedia's proposal's not applicable to the values of specific precious or scarce mineral materials integral to products passing through USA's borders. Permitting the proposal to be applicable to precious or scarce minerals is both economically unsound and would seriously undermine the proposal's purpose.

I haven't yet considered if and how these differences may have affected the Levy Institute's conclusions. ...
Part IV

Bold text --> As you may have inferred from reading my above expressed uncertainty of your meaning, I am again unclear about what you mean.
  • Funding what?
  • What "it?"
I suspect here you mean the creation and distribution of the certificates themselves and the processes of doing so. To the extent that is what you mean....
Xelor, I regret that we're getting entangled with more petty details, rather than discussing what you and I would consider to be the broader considerations with regard to the Import Certificate concept.

Unless I explicitly mention any exceptions, all of my posts are in regard to the “improved” Import Certificate proposal as described in the Wikipedia “Import Certificates” article. That proposal differs from the proposed Balanced Trade Restoration Act of 2006 which I suppose Levy Institute evaluated. “Buffetts proposal” is a much less explicit suggestion rather than a more explicitly drafted proposal.

The faults of the 2006 proposal are referred to in the Wikipedia article.

//////////////////////
Exporters of USA are entitled to agrees to pay the federal fee rate and request that some or all of their export shipments values be assessed. The federal fee rate is applied to the assessed value of the export shipment.
(Federal fee rate) X (Export Shipment's assessed value)
= “Face value” of federally issued certificates.

All imported goods are assessed and they will not be permitted to exit their USA port of entry until the importer surrenders ICs with face values sufficient to cover the assessed values of the imported goods. Surrendered certificates are canceled

For analysis purposes, we can uniformly use the federal fee rate or global markets' price rates of certificates to be the net cost of the IC policy. Federal fee rates paid by exporters of USA goods are (as you suspected) the federal direct costs due to federal “creation and distribution of the certificates themselves and [their] processes of doing so”.

The direct costs to importers of good to the USA is the federal costs plus those importers additional expenses to obtain the certificates.

Respectfully, Supposn
 

Xelor

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Re: USA goods could compete with marginally under-priced products of low-wage nations

Unless I explicitly mention any exceptions, all of my posts are in regard to the “improved” Import Certificate proposal as described in the Wikipedia “Import Certificates” article. That proposal differs from the proposed Balanced Trade Restoration Act of 2006 which I suppose Levy Institute evaluated. “Buffetts proposal” is a much less explicit suggestion rather than a more explicitly drafted proposal.
Let me put it succinctly: Papadimitriou et al did not evaluate the Balanced Trade Restoration Act of 2006. Read the paper.
 
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