Trade Balances' effects upon their nation’s GDP

I'm Supposn · Mar 15, 2016

I’m among the proponents of the proposed unilateral Import Certificate trade policy which if adopted by the USA would significantly reduce USA's chronic annual trade deficits of goods and thus increase USA's annual GDPs.

Refer to the paragraphs entitled "Trade Balances' effects upon their nation’s GDP"
within Wikpedia’s article entitled “Balance of trade”:

https://en.wikipedia.org/wiki/Balance_of_trade#Trade_Balances.27_effects_upon_their_nation.E2.80.99s_GDP

Respectfully, Supposn

joG · Mar 15, 2016

I'm Supposn said:
I’m among the proponents of the proposed unilateral Import Certificate trade policy which if adopted by the USA would significantly reduce USA's chronic annual trade deficits of goods and thus increase USA's annual GDPs.

Refer to the paragraphs entitled
within Wikpedia’s article entitled “Balance of trade”:
https://en.wikipedia.org/wiki/Balance_of_trade#Trade_Balances.27_effects_upon_their_nation.E2.80.99s_GDP

Respectfully, Supposn

I don't believe that would make much economic sense. If you wanted to persuade the population to buy American, that would be fine, if it were a private initiative. But government has no business forcing the citizens to consume, what they do not want.

Ellis_G · Mar 15, 2016

I thought the break down of international trade was a significant factor in the recession and subsequent depression of the 1930's.

Surely protecting American companies just leads to them becoming more poorly run and therefore an economy worse for everyone?

I'm Supposn · Mar 15, 2016

Excerpted from:

https://en.wikipedia.org/wiki/Balance_of_trade#Trade_Balances.27_effects_upon_their_nation.E2.80.99s_GDP

Trade Balances' effects upon their nation’s GDP.

Annual trade surpluses are immediate and direct additions to their nations’ GDPs. To some extent exports induce additional increases to GDP that are not reflected within the export products’ prices; thus contributions to GDP from trade surpluses are generally understated.

Products’ prices generally reflect their producers’ production supporting expenditures. Producers often benefit from some production supporting goods and services at lesser or no cost to the producers.For example, governments may deliberately locate or increase the capacity of their infrastructure, or provide other additional considerations to retain or attract producers within their own jurisdictions. The curriculum of a nation's schools and colleges may provide job applicants specifically suited to the producer’s needs, or provide specialized research and development.

All national factors of production: "https://en.wikipedia.org/wiki/Factors_of_production"], including education, contribute to GDP, and unless globally traded products fully reflect those goods and services, these other export supporting contributions are not entirely identified and attributed to their nations’ global trade.

Annual trade deficits are immediate and indirect reducers of their nations’ GDPs.
Trade deficits make no net contribution to their nations’ GDPs but the importing nations indirectly deny themselves of the benefits earned by producing nations; (refer to “Annual trade surpluses are immediate and direct additions to their nations’ GDPs”). Among what’s being denied is familiarity with methods, practices, the manipulation of tools, materials and fabrication processes.
The economic differences between domestic and imported goods occur prior to the goods entry within the final purchasers' nations. After domestic goods have reached their producers shipping dock or imported goods have been unloaded on to the importing nation’s cargo vessel or entry port’s dock, similar goods have similar economic attributes.

Although supporting products not reflected within the prices of specific items are all captured within the producing nation’s GDP, those supporting but [they're] not reflected within prices of globally traded goods are not attributed to nations' global trade. Trade surpluses' contributions and trade deficits' detriments to their nation's GDPs are understated. The entire benefits of production are earned by the exporting nations and denied to the importing nation.

I'm Supposn · Mar 15, 2016

Ellis_G said:
I thought the break down of international trade was a significant factor in the recession and subsequent depression of the 1930's.

Surely protecting American companies just leads to them becoming more poorly run and therefore an economy worse for everyone?

Ellis_G, you thought wrong.

The proposed unilateral policy of transferable Import Certificates for our global trade of goods is not absolutely “pure” free trade but it is primarily market rather than government driven and it is absolutely competitive free enterprise when transactions are conducted by independent and competing entrepreneurs.

Respectfully, Supposn

I'm Supposn · Mar 15, 2016

joG said:
I don't believe that would make much economic sense. If you wanted to persuade the population to buy American, that would be fine, if it were a private initiative. But government has no business forcing the citizens to consume, what they do not want.

JoG, the proposed unilateral policy of transferable Import Certificates for our global trade of goods is not absolutely “pure” free trade but it is primarily market rather than government driven and it is absolutely competitive free enterprise when transactions are conducted by independent and competing entrepreneurs.

The proposed policy does not “force” anyone to purchase anything.

Respectfully, Supposn

joG · Mar 15, 2016

I'm Supposn said:
JoG, the proposed unilateral policy of transferable Import Certificates for our global trade of goods is not absolutely “pure” free trade but it is primarily market rather than government driven and it is absolutely competitive free enterprise when transactions are conducted by independent and competing entrepreneurs.

The proposed policy does not “force” anyone to purchase anything.

Respectfully, Supposn

I will have to believe you as I cannot open the link.

I'm Supposn · Mar 15, 2016

joG said:
I will have to believe you as I cannot open the link.

JoG, nether can I. I don’t know if the problem’s due to my posted message or to DebatePolitics.

Google the words “ wikipedia import certificates ”
or google " wikipedia balance of trade "
or google " wikipedia balance of trade, effects upon their nations "

or try linking to
USA?s Trade Deficits and Warren Buffett?s Proposal | Economy In Crisis

or
https://en.wikipedia.org/wiki/Import_certificates

or
https://en.wikipedia.org/wiki/Balance_of_trade

I’m again copying and pasting
https://en.wikipedia.org/wiki/Balan...es.27_effects_upon_their_nation.E2.80.99s_GDP

Respectfully, Supposn

James972 · Mar 24, 2016

Ellis_G said:
I thought the break down of international trade was a significant factor in the recession and subsequent depression of the 1930's.

Surely protecting American companies just leads to them becoming more poorly run and therefore an economy worse for everyone?

very true!! protecting and crippling our industries so they don't have to produce world class goods and services would make us a second class country and eventually lead to military defeated.

I'm Supposn · Mar 24, 2016

James972 said:
very true!! protecting and crippling our industries so they don't have to produce world class goods and services would make us a second class country and eventually lead to military defeated.

Ellis_G and James972, you’re both incorrect.

The Import Certificate proposal as described in Wikipedia’s article entitled “Import Certificates” does not favor or discriminate among foreign nations or among any industries within any nations;
If we consider USA importing and exporting as a single global trade industry, it is to some advantage to any enterprise operating in the USA and competes or aspires to compete with foreign goods within or beyond USA’s borders.

It does not tolerate annual USA trade deficits of goods but otherwise does not bar any goods from entering the USA and it's actually an indirect effective subsidy for USA exports of goods.

It would increase USA’s GDP, numbers of jobs and our median wage (more than otherwise).
It is not absolutely pure free trade but it certainly is absolutely pure competitive enterprise.

Respectfully, Supposn

James972 · Mar 25, 2016

I'm Supposn said:
It does not tolerate annual USA trade deficits of goods

yes by protecting and crippling our industries making them, and eventually our nation, second class

and thus subject to military defeat!!

I'm Supposn · Mar 26, 2016

Originally Posted by Supposn:
It, (i.e. the proposed Import certificate policy for USA’s global trade) does not tolerate annual USA trade deficits of goods.

James972 said:
yes by protecting and crippling our industries making them, and eventually our nation, second class
and thus subject to military defeat!!

James972, you write of “protecting and crippling our industries”; “our’ I suppose being USA industries?
Which specific industries are you referring to and how are they being “protected and crippled”?
You’re incapable of writing anything specific and explicit?

Supposn

Lafayette · Mar 27, 2016

CONSOLIDATING AMERICAN MARKETS FOR MANUFACTURED GOODS

joG said:
I will have to believe you as I cannot open the link.

Copy it and reinsert into your URL. (That white horizontal bar at the top of your browser.)

It's a good description of "What is world trade", but that's about all.

Whether or not Import Certificates work "functionally" is the heart of the debate; and I have not seen where the WikiPedia article linked discusses it.

So ... have a look here: Import Certificates

Excerpt:

Concept

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.

Which is why they wont work. First and foremost of which, the trading partners must accept the mechanism, which they are likely to refuse. For two reasons:
*It is useless of Uncle Sam to even try ... he is in no position whatsoever to impose trade mechanisms unilaterally.
*It employs a sledgehammer to bang a nail, most of competition is in industries that have already contracted their workforce due to Market Consolidation to obtain "efficiencies or economies of scale".

Those industries that have been or presently are closing plants are doing so not only because of foreign trade competition. They are doing so because of a consolidation in American production companies that agglomerate (are bought-out), which then close hi-cost units and keep the more productive.

Under successive administrations, American companies have been allowed to Consolidate Markets. They do this to reduce competition which makes their run down the Experience/Learning Curves easier in order to reduce costs and thus enhance profits:

By squeezing out competition, they decrease competition, thus allowing them to maintain "sticky pricing". That is pricing that does not change because of increased competition. Meaning the consumer pays more for the same service/goods.

Which translates directly into profits.

They are manipulating the market, which any real Department of Commerce would forbid were it doing its job well. The economic talent is there to prove retail manipulation. These cases of trade-restriction could be proven before a court of law, should they be brought there.

Which ours apparently are not, particularly in those years where the Replicant Party has owned the presidency .

And to maintain high-profits for companies that deliver stock-options and bonuses to TopManagement, guess what a political party WILL NOT DO to garner their "friendship and funding" during election campaigns.

MY POINT?

This has been going on for all of the 20th century and half of the nineteenth. Right under our noses.

Final infographic: The Bosses of the Senate (1889)

James972 · Mar 27, 2016

I'm Supposn said:
Which specific industries are you referring to

any industry that gets help from the govt through taxes on the competitors goods and services! We have ever increasing free trade because both right and left agree that protecting and crippling industries with trade wars slows down the planets economic growth.

I'm Supposn · Mar 28, 2016

Lafayette said:
Which is why they wont work. First and foremost of which, the trading partners must accept the mechanism, which they are likely to refuse. For two reasons:
*It is useless of Uncle Sam to even try ... he is in no position whatsoever to impose trade mechanisms unilaterally.
*It employs a sledgehammer to bang a nail, most of competition is in industries that have already contracted their workforce due to Market Consolidation to obtain "efficiencies or economies of scale". ...

Lafayette, you’re implying when comparing prospective commercial opportunities, many enterprises have somewhat reduced their opinions of USA markets’ ranking among the world’s markets? You’re acknowledging other markets have been improving at a much faster rate than ours?

In excess of the past half century, USA has consistently experienced annual trade deficits’ of goods which in turn more than otherwise have reduce our GDP, numbers of jobs and median wage.

While USA’s annual balances of trade has been depreciating, some other nations’ trade balances have been improving and those improvements are also reflected as improvements of their median wages’ purchasing powers.
Most enterprises cannot afford to fully invest their not unlimited resources to develop their sales within all of the world’s markets at the same time. Dependent upon their own cost-benefit analysis, they incrementally invest to increase their sales revenues.

We continue to squander our advantages due to USA’s still great domestic market.
Of course our economy would have been best served if we had adopted the Import Certificate, (IC) policy many years ago, but we didn’t do that; it will be well served if we adopt the IC policy now, but we won’t do that; but it will be improved if and when we do adopt the IC policy.

You certainly overstated the case when you wrote “It is useless of Uncle Sam to even try [to adopt a transferable Import Certificate policy for global trade] ... he is in no position whatsoever to impose trade mechanisms unilaterally”.

Respectfully, Supposn

I'm Supposn · Mar 28, 2016

Lafayette said:
CONSOLIDATING AMERICAN MARKETS FOR MANUFACTURED GOODS

... Excerpt: ...

Which is why they wont work. First and foremost of which, the trading partners must accept the mechanism, which they are likely to refuse. For two reasons:
*It is useless of Uncle Sam to even try ... he is in no position whatsoever to impose trade mechanisms unilaterally.
*It employs a sledgehammer to bang a nail, most of competition is in industries that have already contracted their workforce due to Market Consolidation to obtain "efficiencies or economies of scale".

Those industries that have been or presently are closing plants are doing so not only because of foreign trade competition. They are doing so because of a consolidation in American production companies that agglomerate (are bought-out), which then close hi-cost units and keep the more productive. ...

... Which ours apparently are not, particularly in those years where the Replicant Party has owned the presidency . ...

... MY POINT?
This has been going on for all of the 20th century and half of the nineteenth. Right under our noses.

Final infographic: The Bosses of the Senate (1889)
View attachment 67199400

Lafayette, I’m a proponent for USA adopting the unilateral global trade policy as described in Wikipedia’s article entitled “Import Certificates”. It would succeed due to:
(1) The logical truth that annual trade deficits are ALWAYS immediately detrimental to their nation’s economy.
[Refer to the paragraphs entitled “Trade Balances' effects upon their nation’s GDP” within the Wikipedia article entitled “Balance of trade”].
(2) The axioms that enterprises (as all creatures) do try to function within their environments in manners that they perceive to be to their own best advantages and they will attempt to modify their manners to adjust for what they perceive to be changes of their environments.

An Import Certificate, (IC) policy mandates that importers must surrender IC’s with face values that cover the assessed values of their goods they want to bring into the USA. That is the only legal mandate upon any enterprise.

There is no economic advantage to USA participating within international trade agreements bilaterally or within pacts (of nations). We should continue participating within international agreements having other than economic purposes.

In reaction to USA adopting an IC policy could conceivably to USA’s immediate harm. Other nation or nations may be willing to “cut off their noses in order to spite their own faces”. (If any nation would do so, I expect that France would be one of those nations).
But within the ALL durations, such reactions opposing USA’s interests would be of much greater harm to themselves and of much lesser harm to the USA.

I could attempt a more explicit response if could specifically detail the fault you perceive within the IC proposal.
I’m aware of the concepts and advantages due to economies of scale and consolidations. Could you please directly relate what you’re discussing to the Import Certificate proposal.

Respectfully, Supposn

I'm Supposn · Mar 28, 2016

Originally Posted by Supposn:
Which specific industries are you referring to?

James972 said:
any industry that gets help from the govt through taxes on the competitors goods and services! We have ever increasing free trade because both right and left agree that protecting and crippling industries with trade wars slows down the planets economic growth.

James972, I’m among the proponents of an Import Certificate policy. Within that proposal I’m aware of no government taxes upon competitors products but you’re correct in surmising it certainly is less favorable to foreign products sold in the USA and of some benefit to any enterprise’s USA operations that compete or aspires to compete with foreign goods anywhere in the world. USA purchasers of foreign goods indirectly fund the proposal’s entire net costs.

You’re opposed to favoring enterprises doing business in the USA? You prefer lesser numbers of USA jobs and lesser USA median wage?

Respectfully, Supposn

I'm Supposn · Mar 28, 2016

Lafayette said:
...
... particularly in those years where the Replicant Party has owned the presidency . ...

Lafayette, what’s the “Replicant Party”?
Respectfully, Supposn

Lafayette · Mar 28, 2016

Replicant - Republican

Lafayette · Mar 28, 2016

I'm Supposn said:
In excess of the past half century, USA has consistently experienced annual trade deficits’ of goods which in turn more than otherwise have reduce our GDP, numbers of jobs and median wage.

What I am saying is that the closing of production facilities is a natural consequence of the fact that companies have agglomerated their production facilities - keeping some, buying others and closing still others. In fact, those most remote from transport arteries (train or highways) are the one that suffer most.

These plants were often created in remote places simply because energy supplies (coal) was nearby.

They have not weathered the Test of Time. That is, other producers in other places with cheaper costs.

It is a natural evolution. As I keep insisting - Nothing Is Forever.

Not our lives, not the way we live, nothing ... let's all get used to it! We live in one of the most flexible countries in the world, where people can move at a moment's notice and find a job elesewhere.

Imagine that you were living in Europe and were French, and because you didn't speak any foreign language (especially English) you could not find a suitable job anywhere else. What would you do.

Drive a taxi. There is no magical solution, except either enhance your skills/competencies or get off your butt and look elsewhere for a job.

The lesser your abilities, however, the fewer jobs are open to you. Regardless of age, you MUST train for another job. Some of the necessary skills are not that hard to assimilate.

However, those jobs are not going for the pay-scale rates that existed in the manufacturing industry just 20/30/40 years ago. And why?

Because with those older pay-scales, companies cannot produce in America at a price Americans want to purchase them. It's like a dog chasing its tail ...

I'm Supposn said:
You certainly overstated the case when you wrote “It is useless of Uncle Sam to even try [to adopt a transferable Import Certificate policy for global trade

Look, but I am writing from France, and I know people at the WTO in Geneva. I've spoken with them. I have more-or-less given you their input. It just aint gonna work, because it will be seen (one more time!) like the US imposing the rules on everybody else. That doesn't work anymore in this Brave New World of globalized trade ...

Besides, it tries to fix a problem for which people think Trade is the cause. When, in fact, it is pricing internal to the US due to Market Consolidation, not external that is causing the plant-layoffs.

Lafayette · Mar 28, 2016

I'm Supposn said:
I've responded multiple times regarding Import Certificates. That'll do for me

I've responded multiple times regarding Import Certificates.

That'll do for me, with a thank-you for the fruitful exchange of POVs ...

James972 · Mar 28, 2016

Lafayette said:
I've responded multiple times regarding Import Certificates.

That'll do for me, with a thank-you for the fruitful exchange of POVs ...

there is nothing fruitful about a goof liberal plan to cripple and protect American industry

I'm Supposn · Mar 29, 2016

Lafayette, the Import Certificate, (IC) policy modifies USA’s laws and rules governing goods entering the USA.

Other nations and their entities are expected to behave in manners they consider to be to their own best interests. I believe all of us, (even James972) agrees nations, enterprises and people are not expected to behave contrary to what they believe to be their best interests.

Regarding any particular species product that generally is now being imported rather than being produced in the USA:
Let us consider such product that’s now generally imported because foreign producers enjoy a small advantage, (i.e. a “marginal” advantage), and USA enterprises are unable to compete with the proportionally small foreign price advantages or they do not consider the risks of such competition to be currently justified.

If due to USA’s adoption of the IC policy the price increase of the foreign product sold to USA purchasers were sufficient to induce some USA enterprises to compete with the foreign producers of such products, USA’s GDP, numbers of jobs and median wage would be somewhat increased.
We all agree due to USA’s adoption of an IC policy such goods, (both foreign and/or the similar goods that are now domestically produced) will all increase in price to USA purchasers. To the extent that the effective demand for such goods may be elastic, increased price of such goods will induce reduction of their sales within the USA.

Opponents of the IC proposal consider additional cost to USA purchasers as increased GDP that did not actually produce additional goods and the only additional services purchased were additional government administrative and goods assessing tasks. Proponents of the IC proposal point out that at least the federal government is being forced to be much more aware of what is being brought into our nation; USA’s border security is now unacceptably poor.

Let us further consider any reduction of product units sold in the USA due to USA purchasers’ balking at those increased prices. I believe that most of those USA non-purchasers will spend their money for alternative goods and service products. A good portion of those purchases will be for USA made products. (Purchasing less doesn’t seem to be within our DNA codes).
USA production increases our GDP, numbers of jobs and median wage more than otherwise.

With regard to USA’s non-purchasers, some of those unspent dollars will be transfers of wealth deposited into financial institutions. Thus the wealth is circulated as loans or investments. If and when the wealth is to any extent liquidated, the liquidators must make renewed determinations of how the wealth is to be spent. Unspent wealth generally does not sit in safety deposit boxes or in mattresses.

There is no economic difference between similar USA and foreign goods within markets. Their entire economic differences all occur prior to the goods leaving their USA producer’s shipping platform or the foreign goods being “handled” by USA labor. USA production increases our GDP, numbers of jobs and median wage. Foreign production contributes nothing to USA’s economy.

I am not opposed to USA participation within global trade. I’m certainly opposed to an altruistic trade policy for the benefit of nations that cannot or will not better compensate their own workers.
If the U.S. congress determines we should continue an altruistic trade policy, it should be directly funded by our federal budget rather than primarily to the detriment of USA employees, their dependents and any enterprises that are also much more dependent upon the level of USA wages’ purchasing powers.

Respectfully, Supposn

Lafayette · Mar 29, 2016

James972 said:
there is nothing fruitful about a goof liberal plan to cripple and protect American industry

In fact, I am very suspicious of any sort of government intervention.

BUT, I live in France where certain subventions/interventions are absolutely prime-responsibilities of a national government. These I have witnessed with my own eyes. They are, as I have explained many a time, a National Health Service that does not cost an arm-and-a-leg (humour intended!), and Free Tertiary Education.

The first of which the Replicants are fighting tooth-'n-nail to prevent at all costs - a little "gift" to the 10Percenters (of total National Income) at the AMA; and the second the benefit of which is so effing obvious it is beyond-belief that it has not been implemented fully across the nation in state universities as it has for Primary/Secondary schooling ...

I'm Supposn · Mar 29, 2016

Lafayette said:
... Look, but I am writing from France, and I know people at the WTO in Geneva. I've spoken with them. I have more-or-less given you their input. It just aint gonna work, because it will be seen (one more time!) like the US imposing the rules on everybody else. That doesn't work anymore in this Brave New World of globalized trade. ...

Lafayette, I believe that superior national economies provide their populations with sustainable superior living standards.
Although James972 may believe I’m the worst kind of devil, (i.e. a liberal devil), I'm a populist with a liberal point of view; I may be a greater proponent and certainly no less a proponent of independent participants having equal opportunities to effectively compete within open market places.

I am not willing to compromise my nation’s economy to altruistically better serve other nations and I’m particularly opposed to regressive policies that are of greater financial burden upon employees and their dependents. They're among those within our nation that can least afford to carry the additional weight.

When comparing median wages between nations, we should not simply gauge their amounts expressed as relative only to the U.S. dollar’s exchange rate to Euros.. Median wage’s purchasing powers within their nations are more complex than that.

I’m not familiar with France’s median wage’s purchasing power within France but I believe that all or almost all EU nations have healthcare policies that are more liberal that that of the USA. When considering the Euro’s purchasing power in France, we should also consider that their middle-income earners are not expected to pay for many medical expenses that are normally paid by USA middle-income earners.

I do not suppose that there are many middle-income French citizens that are not covered by France’s healthcare programs but that’s not at all unusual for USA’s middle income earners and due to the unreasonable maximum incomes that qualify for U.S. states’ Medicaid programs that is the usual condition for among USA’s lower income earners. Most of USA’s working poor do not have adequate medical insurance and many of those that are adequately insured can not afford the co-payments and adequate medical care is effectively denied to them.

As you pointed out, children of middle-income families that have demonstrated only good, (rather than only extraordinary) scholastic accomplishments are entitled to free university educations. It’s to our nations shame and economic detriment that so many children of middle-income families that have graduated from our colleges and universities must strive for a good portion of their lives in order to repay their student loans.

Because EU nations do not consider healthcare and education as only individual’s problems, their expenditures are spread among all of their nations’ individuals and enterprises. This isn’t apparent if we process nations' median wage amounts through only through their global exchange rates when making comparisons among them.
I suppose that USA’s median wage still ranks high but differences between ours and many other nation’s median rates’ effective purchasing power has been constantly narrowing; USA wages have been performing poorly over the passage of time.

Respectfully, Supposn