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Old March 31st, 2011, 09:29 PM   #1
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Transferable Import Certificates Vs a Tariff policy



I’m a proponent of a trade policy based upon transferable Import Certificates, (ICs). (Refer to the discussion tread "Reduce the trade deficit; increase GDP & median wage").



IC policy proposal is often compared to tariff policies. Both policies would increase the prices paid by USA purchasers of imported goods. Both policies would not increase federal net spending or debt. IC policies would absolutely eliminate USA’s aggregate trade deficit of goods’ assessed values. Tariffs purpose is dependent upon the tariff rates that are enacted.







The IC policy would absolutely eliminate the trade deficit REGARDLESS of imports’ additional prices’ to US purchasers; (i.e. even if prices for aggregate imported goods increased by only a penny per item, USA’s trade deficit of those aggregate goods would be eliminated).



Opponents of ICs point out that it’s a market driven policy and government would not cap prices upon the global IC market.



Eliminating the trade deficit of aggregate goods subject to a tariff policy could be assured only if those tariff rates were set at the maximum rate that ICs would ever reach.



Tariffs would be an additional source of federal revenue. IC’s are an additional revenue source for exporters of U.S. goods and would be an indirect but effective subsidy of USA exports.







Respectfully, Supposn
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Old March 31st, 2011, 09:35 PM   #2
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Some would prefer tariffs to a transferable Import Certificates, (ICs) because rather than lesser additional cost to USA purchasers of imported goods, they want the highest tariff rates that (they’re certain) will make us to the greatest extent more self sufficient. They’d prefer an almost certain trade surplus to certainly eliminating the trade deficit upon the aggregate of all goods’ assessed values.



The IC proposal would not hinder a trade surplus from developing but under this proposal it’s not likely to occur very often within my and possibly the majority of my childrens' remaining life times.



On the other hand I believe that the price of the extremely high tariffs’ induced trade surplus would be a lesser (than an IC’s policies) sum of USA’s aggregate imports plus exports. I can’t argue from certainty but I strongly suspect that an IC rather than a tariff policy would greater increase our GDP.



The IC proposal is a market rather than a government driven trade policy. If a trade surplus occurs under an IC policy it would be market induced surplus. I know that trade deficits are detrimental to the GDP. I don’t know that a trade surplus due to government’s determined price increased prices to USA’s purchasers of imports would increase our GDP more (than IC’s balanced trade). I suspect that IC would better serve us.







Respectfully, Supposn
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Old April 1st, 2011, 07:26 AM   #3
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All of the economic power houses use some sort of tariff based system, this I haven't heard of before but at least someone is talking about the issues. You might know more than me about this but, are there any countries right know that's implemented the IC system? And are there' any politicians right now that's advocating for it (besides billionaires).



Thank you very much, Fayt
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Old April 1st, 2011, 07:55 AM   #4
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I think nations whose goods are subject to ICs will either do the same or impose tariffs on US goods. And that will reduce our ability to export, which will affect Americans' pocketbooks.



If you disagree, explain why please.
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Old April 1st, 2011, 08:18 AM   #5
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Originally Posted by imaginethat View Post
I think nations whose goods are subject to ICs will either do the same or impose tariffs on US goods. And that will reduce our ability to export, which will affect Americans' pocketbooks.



If you disagree, explain why please.


The countries that're benefiting the most form the U.S. doing away of our protectionist trade barriers starting in the 1980s, doing away with tariffs, doing away with foreign content laws, doing away with American purchasing laws for U.S. contractors in the defense department are China, Japan, Twain, South Korea, principally and European countries. These are countries that are aggressively protectionist. They have no NO intention in participating in "free trade" and it's there for the world to see.
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Old April 1st, 2011, 02:04 PM   #6
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Fayt, no nation has ever attempted to do this. Two Democratic Senators proposed it in 2006. It was rejected by the Republican led committee.



I’m suspicious and pessimistic by nature; (that’s generally the case among technicians rather than sales persons). My profession was computer programming and system analysis. I often stated that a proposal “seems logical and it should work; I wonder why it won’t work”. My task was to find the potential bugs and the remedy them before I wrote the system specs and had the programs written. If the team couldn’t remedy the bugs, we discarded the proposal.



We did not fail to anticipate critical problems and thus we were not in the position of encountering serious bugs within an enacted system that we couldn’t handle.



I’ve devoted time and effort to detecting potential bugs within this proposal. Most of the conclusions I’ve reached are described in this discussion thread’s first two messages. Those messages explain the reasons for my extreme confidence in the superiority of this transferable Import Certificate proposal over all other global trade concepts I’ve encountered.



Respectfully, Supposn
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Old April 1st, 2011, 06:54 PM   #7
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Quote:
Originally Posted by imaginethat View Post
I think nations whose goods are subject to ICs will either do the same or impose tariffs on US goods. And that will reduce our ability to export, which will affect Americans' pocketbooks.



If you disagree, explain why please.


ImagineThat, I suppose your concern is what would be the international ramifications of USA adopting a transferable Import Certificate, (IC) policy and the net effect upon the USA’s economy.







USA has been suffering from increasing trade deficits for over a half century and we have had the greatest amounts of annual trade deficits. The policy’s benefits are due to its absolute ability to eliminate the entire aggregate assessed values of goods that may be subject to such assessments. It is also an indirect export subsidy of such goods.







The extent of the policy’s benefit is the difference of the nation’s GDP due to adopting or failing to adopting theIC policy. I do not deny the initial immediate international reaction will be unfortunate for almost everyone.



[Refer to message #10 of the discussion “Reduce the trade deficit; increase GDP & median wage”].







Normally most changes are resisted. Change is often severely resisted by those who do not recognize their own benefits due to the proposed change.







If USA adopted an IC policy it would be of advantage to any producer or exporter of USA products that competes or aspires to compete with foreign goods within or beyond USA’s borders.







Producers and importers of foreign goods would generally pass their IC costs onto USA purchasers of imported goods but their sales will be reduced due to the price increases. USA goods exporters’ additional revenues due to ICs will enable them to reduce their prices of USA goods to foreign purchasers and the global competitive markets will press them to do so. This will increase sales of USA goods within foreign markets and that will further reduce sales of foreign produced goods.







It’s to be expected that foreign nations will enact or increase their tariffs. Some nations that suffer trade deficits may follow our example and enact their own IC trade policy. Providing a foreign nation does not discriminate and penalizes USA goods to a greater extent than goods they import from any other nations, the USA would have no justifiable complaint. Otherwise the U.S. should no longer “turn the other cheek”. [I’ll write an additional message further discussing foreign nation’s current treatment of USA goods and our attempts to sell USA goods in foreign markets].







I suppose that if all nations treated import products in a manner of their own choosing, providing they did not discriminate between nations whose goods are being imported into their nations, the world would be better for it. I’m confident that under such circumstances if the USA adopted an IC trade policy, we would be better for it.







Respectfully, Supposn
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Old April 2nd, 2011, 01:13 AM   #8
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Quote:
Originally Posted by Supposn View Post
Fayt, no nation has ever attempted to do this. Two Democratic Senators proposed it in 2006. It was rejected by the Republican led committee.



I’m suspicious and pessimistic by nature; (that’s generally the case among technicians rather than sales persons). My profession was computer programming and system analysis. I often stated that a proposal “seems logical and it should work; I wonder why it won’t work”. My task was to find the potential bugs and the remedy them before I wrote the system specs and had the programs written. If the team couldn’t remedy the bugs, we discarded the proposal.



We did not fail to anticipate critical problems and thus we were not in the position of encountering serious bugs within an enacted system that we couldn’t handle.



I’ve devoted time and effort to detecting potential bugs within this proposal. Most of the conclusions I’ve reached are described in this discussion thread’s first two messages. Those messages explain the reasons for my extreme confidence in the superiority of this transferable Import Certificate proposal over all other global trade concepts I’ve encountered.



Respectfully, Supposn


That's good Suppsn, but are there anyone talking about the idea of IC today? I can't seem to find a politicians who's avocating for the idea. You also said somthing about the free enterprise, are you a believer in "free markets". IC are interesting, I've just never heard about it until now.
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Old April 2nd, 2011, 04:29 AM   #9
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Fayt, apparently extremely few people are discussing or are even aware of this concept.



I rarely encounter any mention of it and sometimes suspect that some of those mentions might have been originally due in part to my own spreading the word efforts. My behaving as a “Johnny Appleseed” could be viewed by some as due to my own conceit.








Regardless of published photos from the viewpoints of rockets and satellites which clearly indicate the curvature of the earth’s horizon, there are still those who reject the notion that the earth’s a globe. If numbers of people are aware of a concept but they predominately don’t accept its premises, that’s more reason to question the concept’s validity. I do not accept the lack of public awareness as an indication of fault within the concept itself.







Import Certificates are not a rejected concept, it’s an almost unknown concept. I believe it’s a concept worthy of consideration.







Respectfully, Supposn
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Old April 2nd, 2011, 07:11 AM   #10
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I agree it's an idea worth considering, as it seems reasonable. Warren Buffet has spoken favorably about ICs. The trade deficit is unsustainable, iow, it will break our nation with sufficient time. So will budget deficits, but that's another topic for another thread.



I mean, look at it:









Another interesting graphic showing cumulative trade account balances:









With the exceptions of Japan, China, and some western European countries, every country with a positive balance is an oil exporter. The elephant in the room: China's currency is and has been undervalued, making it's exports cheap. China's problem is that its internal market is growing and how China handles that will remain to be seen.



All that aside for a moment, maintaining America's standard of living, or of consumption, appears unsustainable in the long run. Frankly, it's already unsustainable and has continued only because of massive borrowing. Can we manufacture and export our way out of this conundrum? Perhaps. We also need to replace our oil imports somehow. Simple conservation would be the fastest, most immediate way to reduce oil imports, but conservation isn't popular, and our senses are skewed regarding our use of energy anyway. It's an oft-noted fact: the US, five percent of the world's population, does consume 25 percent of the world's output of oil.



Two more factors to consider: The US doesn't produce many everyday items so we've no choice but to import these items. And, under any balancing scheme, the cost of these everyday items will increase with ICs. If US exports increase, overall US citizens may have more money in their pockets, yet, we'll need more money in our pockets until US companies are created to manufacture many everyday items now imported. And even then, the overall cost of everyday items will be higher than presently.



And another factor: The world economy isn't ruled by supply and demand, The price of most essential commodities, and even orange juice and cocoa, is set by commodities traders who also create derivative investment vehicles. Oddly, terribly?, investors in these vehicles benefit from rising commodity prices. As anyone knows who has traded commodities, the big traders do lure in investors counting on rising commodity prices, and then they tank the markets ... being sure themselves to go from hold to put positions before the tanking begins.



It's freakin' criminal, but the reality of it is documented.



The economy is one hell of a twisted, convoluted, and interwoven network. The odds of correcting its deficiencies are reduced significantly by the commodities trade. Sometimes it seems to me that the only solution is to hit the reset button.
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