The costs and benefits of producing or importing.

I'm Supposn said:

their consequences significantly differ.

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if the consequences significantly differ why so afraid to tell us what they are? what did we learn from the liberal's fear?

I'm Supposn said:

Orphan Slug, what are you advocating? Do you seek USA economic policy that attempts to micro-manage our nation's economy, or policy of some boundaries, or of no boundaries? If what you advocate isn't apparent, your posts are less clear amd more contradictory.
Do we agree that a “mixed” economic policy is best when it seeks to “tilt” rather than “drive” markets to our advantage?

If you're opposed to our government trying to affect the global exchange rate of the U.S. dollar, I also lean toward your direction. Alan Greenspan, an ex-chairman of the Federal Reserve Board also seems less than entirely convinced that we should try, or we can generally succeed to accomplish that task].
Many, (if not the majority) Economic Policy Institute's economists are opposed to USA's chronic annual trade deficits, but they advocate reducing it through pro-active international negotiations to reduce the U.S. dollar's exchange value, rather than anything similar to the Import Certificate policy.

I'm an advocate of policy established by explicitly drafted laws and regulations rather than by ad-hoc negotiations. I'm among the proponents of government by written law rather than by constant negotiations among men. I contend that Import Certificate policy, rather than currency manipulation is the significantly superior method to increase our annual GDP's and numbers of jobs more than otherwise.

Competitive global markets are “uncontrollable”, but nations, (including the USA) continue attempting to affect currency markets to their nation's greater advantage or lesser disadvantage. Most, (if not all) of USA's more recent Democratic and Republican presidents have accused other nations of manipulating the currency exchange rates to the detriment of our nation.

Respectfully, Supposn

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I am advocating to not use non-specific tariffs (or really any other kinds of tariffs) to deal with trade deficits. They only cause problems and increase the costs of goods and services, and in this case create an uncontrollable means where only a few can capitalize on Import Certificates yet everyone else ends up impacted.

What you advocate is policy that risks isolationism, and it will only be big business that absorbs the policy while all others end up closed off to international trade.

You have no evidence that you can achieve a positive trade balance, and increased domestic labor, and continued consumption of all the products and services at the same levels or more impacted by Import Certificates. And that means dropping a bomb on the economy.

What Alan Greenspan suggested was that persistent trade deficits are a risk, but at no time did he suggest non-specific tariffs to deal with that. You are abusing what he said to make a point about something he would not advocate. Even recently he has said that "creeping protectionism" could cause issues for both trade and US Dollar handling. Your policy would impact both, and you foolishly suggest you can control it all. Greenspan was not supportive of tariffs on steel for example, and it stands to reason he would not advocate non-specific Import Certificates.

Something else you are failing to understand (or purposely ignoring) is Greenspan and other economists are speaking about economic impact. Dealing with trade deficits to an economist means looking at the reasons for them, and consideration of what could be done when thinking about globalization impact to any economy. Tariffs avoid the debate, and ignores that other nations will respond. China did, and we can assume with ease other nations would impacted by your Import Certificates (or, tariffs.)

At the end of the day there is no positive economic result from non-specific tariffs no matter what you call them.

I'm Supposn said:

Orphan Slug, Wikipedia's description of the improved Import Certificate policy is very explicit rather than “non-specific”.
The differences between tariffs and Wikipedia's Import Certificate policy differ in details. Due to those “details”, their consequences significantly differ.

Assuming you intend to expand upon my ignoring “basic economics”, please critique Import Certificate rather than tariff policy.

Respectfully, Supposn

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An Import Certificate is a tariff, no matter what is done to obtain one.

Originally Posted by I'm Supposn:
Orphan Slug, Wikipedia's description of the improved Import Certificate policy is very explicit rather than “non-specific”.
The differences between tariffs and Wikipedia's Import Certificate policy differ in details. Due to those “details”, their consequences significantly differ.

Assuming you intend to expand upon my ignoring “basic economics”, please critique Import Certificate rather than tariff policy.

Respectfully, Supposn

OrphanSlug said:

An Import Certificate is a tariff, no matter what is done to obtain one.

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Orphan Slug, apparently you're aware that Import Certificates are an additional cost to the enacting nation's purchasers of imported goods and you're not aware of anything else about it? You're unable to intelligently critique Import certificates and you expect me to defend tariffs. I pass. Respectfully, Supposn

I'm Supposn said:

Originally Posted by I'm Supposn:
Orphan Slug, Wikipedia's description of the improved Import Certificate policy is very explicit rather than “non-specific”.
The differences between tariffs and Wikipedia's Import Certificate policy differ in details. Due to those “details”, their consequences significantly differ.

Assuming you intend to expand upon my ignoring “basic economics”, please critique Import Certificate rather than tariff policy.

Respectfully, Supposn

Orphan Slug, apparently you're aware that Import Certificates are an additional cost to the enacting nation's purchasers of imported goods and you're not aware of anything else about it? You're unable to intelligently critique Import certificates and you expect me to defend tariffs. I pass. Respectfully, Supposn

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You can keep posting the Wikipedia link all you need to, with all your edits to it.

There is nothing specific about an Import Certificate. We have no idea who will sell them, who will buy them, nor where they will be applied. No matter who issues them to exporters, Department of Treasury or Department of Commerce or whoever else, at that point they become market driven on who does something with them. That makes it a non-specific tariff as the cost of the Import Certificate ultimately lands on the importer on the assumption that the cost forces domestic production increases.

That is a tariff, no matter how you cut it.

OrphanSlug said:

That is a tariff, no matter how you cut it.

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yes a simple tariff tax on the American people because liberals lack the IQ to understand how capitalism works. And don't forget, because of their ignorance
the tariff tax is but one of 10001 ways the liberal wishes to interfere with the economy.

OrphanSlug said:

You can keep posting the Wikipedia link all you need to, with all your edits to it.

There is nothing specific about an Import Certificate. We have no idea who will sell them, who will buy them, nor where they will be applied. No matter who issues them to exporters, Department of Treasury or Department of Commerce or whoever else, at that point they become market driven on who does something with them. That makes it a non-specific tariff as the cost of the Import Certificate ultimately lands on the importer on the assumption that the cost forces domestic production increases.

That is a tariff, no matter how you cut it.

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OrphanSlug, the Wikipedia article's reasonably specific. I regret if you consider it a challenge to your comprehension. I have a higher opinion of you.

You did correctly surmise from the article that the federal government would issue the certificates. You apparently understood that they could be sold or traded in open markets, their value was market driven, they would be of cost to importers of goods into the USA, and the article contends that the policy would increase USA's domestic production.
You apparently surmised and understood more than you give yourself credit for comprehending.

Tariffs are generally of a fixed amount or rate of cost to importers of products. I will not quibble with your term, "a non-specific tariff". Among import certificate's characteristics are its effectively serving some functions of a tariff, but there are critical differences between tariffs and Import Certificates.

Import Certificates will significantly reduce, (if not eliminate) USA's chronic annual trade deficits of goods while increasing our GDP and numbers of jobs more than otherwise. It accomplishes this at market determined Import Certificate prices.
Tariffs could not greater reduce USA's trade deficits and could only reduce USA 's trade deficits to the same extent by levying extremely high tariffs upon all imported goods at that same or somewhat similarly high tariff rates; the consequences of such high tariffs would likely be economically detrimental.

I'm Supposn said:

OrphanSlug, the Wikipedia article's reasonably specific. I regret if you consider it a challenge to your comprehension. I have a higher opinion of you.

You did correctly surmise from the article that the federal government would issue the certificates. You apparently understood that they could be sold or traded in open markets, their value was market driven, they would be of cost to importers of goods into the USA, and the article contends that the policy would increase USA's domestic production.
You apparently surmised and understood more than you give yourself credit for comprehending.

Tariffs are generally of a fixed amount or rate of cost to importers of products. I will not quibble with your term, "a non-specific tariff". Among import certificate's characteristics are its effectively serving some functions of a tariff, but there are critical differences between tariffs and Import Certificates.

Import Certificates will significantly reduce, (if not eliminate) USA's chronic annual trade deficits of goods while increasing our GDP and numbers of jobs more than otherwise. It accomplishes this at market determined Import Certificate prices.
Tariffs could not greater reduce USA's trade deficits and could only reduce USA 's trade deficits to the same extent by levying extremely high tariffs upon all imported goods at that same or somewhat similarly high tariff rates; the consequences of such high tariffs would likely be economically detrimental.

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It does not matter how many times you reference a Wikipedia page (you are least partially edited,) nor how many times you try to swipe at me personally.

The issue is the same.

In terms of economics (i.e. the point of this area of the forums) what an Import Certificate does is apply itself in a similar manner as a tariff. The idea is applying a cost to a product or service as a means to have domestic production take the place of importing in the product or exporting out the service. We can call this anything you want to but the idea is promoting domestic production or domestic labor. This means higher costs, and that means a change to consumption.

This does something (again,) it forces other nations to adapt to any nation applying the cost increase. It is not about trying to “quibble” with you, it is about understanding economic impact here and elsehwhere.

It has nothing to do with the political aspect of the argument, and everything to do with the plausible economic impact. Raising prices on products and services will not equate to continued consumption of those products and services at the same rate, we are talking about artificial aggregate shifts. This changes things, and it is unreasonable to assume you can inflate costs and expect all other factors to remain.

Your idea directly goes after organizations that have a business model based on international production at inexpensive rates for the purpose of consumption here, right or wrong Import Certificates speak directly to those business models to adapt. We have no expectation you can control domestic labor to product the same products at similar rates, it all ends up increased costs. That means the business model adapts to new consumption levels of those same products and services at higher costs (and that assumes the business models try.)

I get you are invested in the idea, but it has too many complications to be plausible in the simplistic terms your Wikipedia article suggests.

OrphanSlug said:

... I get you are invested in the idea, but it has too many complications to be plausible in the simplistic terms your Wikipedia article suggests. ...

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OrphanSlug, I get that you're opposed to the concept and believe it's too complex. I of course disagree with you.

I searched your post for any specific fault you detected and your explanation as to why, due to that fault the proposal would not work. I did not find anything like that in your post. You contend the proposal's unfeasible, but you can't explain the hows and whys? Can't you post something that's more explicit?

Respectfully, Supposn

I'm Supposn said:

Can't you post something that's more explicit?

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tariff taxes on the American consumers make them poorer not richer. Is that your objective??

James972 said:

tariff taxes on the American consumers make them poorer not richer. Is that your objective??

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James972, you often post that the policy described within Wikipedia's "Import Certificates" article would be detrimental to USA's industries.
You've never been able to specifically explain exactly how and why it wouldn't increase our GDP and numbers of jobs more than otherwise. You're unable to post explicit arguments to refute comparatively explicit descriptions and explanations. Unlike your posts, the Wikipedia article's comparatively explicit and and specific.

We both claim to have confidence in independent USA enterprises competing within equitable USA domestic marketplaces, but you claim that would not occur if the USA adopted the Import Certificate policy; specifically, how and why would that not occur?
Are you claiming that USA's chronic annual trade deficits do not indicate USA has purchased more products than we produced? Can you explain how or why that's not true?

Do you believe that lesser GDP per capita is to are nations best economic interests, than specifically explain why that's your contention?. How or why would USA's increased GDP and numbers of jobs be net detrimental to USA consumers if those consumers are overwhelmingly members of families primarily dependent upon wages?

Respectfully, Supposn

I'm Supposn said:

.
You've never been able to specifically explain exactly how and why it wouldn't increase our GDP and numbers of jobs more than otherwise.

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When you raise taxes you take money out of the economy and thus slow it down and reduce GDP 1+1=2. This is why Trump started with massive tax cut to stimulate economy. Econ 101,class one, day one, hour one.

James972 said:

When you raise taxes you take money out of the economy and thus slow it down and reduce GDP 1+1=2. This is why Trump started with massive tax cut to stimulate economy. Econ 101,class one, day one, hour one.

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James972, money is being transferred, but not (as you contend) taken “out of the economy”. The proposal is not a net increase of government revenue.
To the extent of Import Certificate prices exceeding the government fees, the policy behaves as a price subsidy of USA exports which are an increase of USA's domestic production that are reflected as increased GDP and numbers of jobs.
Federal tasks due to the policy, are federal jobs that also contributing to USA's GDP. (Additionally it's extra “eyes” on our imports, which currently is a national security issue).

To the extent that the policy reduces our currently lost sales of domestic products due to being “crowded out" of the markets by foreign goods, the increased sales of domestic goods are also reflections of increased USA production and numbers of jobs.

Within better or lesser years, USA's annual chronic trade deficits have always been net detrimental to our GDP and numbers of jobs. Where's the money “out of our economy?
Respectfully, Supposn

I'm Supposn said:

The costs and benefits of producing or importing:...

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Is based on concepts you cannot understand.

Your false beliefs are predicated on the erroneous assumption that each $1 of imports generates $1 of GDP.

It does not. $1 of imports generates $3 to as much as $28 of GDP. You always benefit from that, not only from increased GDP, but from increased Standard of Living as well.

The Soviet Union always had a positive trade balance, but the Soviet people had an inferior Standard of Living, because they did not have access to dozens and dozens of fruits and vegetables that Americans had access to, and the diet of Americans was far superior to that of the Soviet people.

Mircea said:

Is based on concepts you cannot understand.

Your false beliefs are predicated on the erroneous assumption that each $1 of imports generates $1 of GDP.

It does not. $1 of imports generates $3 to as much as $28 of GDP. You always benefit from that, not only from increased GDP, but from increased Standard of Living as well.

The Soviet Union always had a positive trade balance, but the Soviet people had an inferior Standard of Living, because they did not have access to dozens and dozens of fruits and vegetables that Americans had access to, and the diet of Americans was far superior to that of the Soviet people.

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Mircea, similar imported or domestic vehicles being merchandised, distributed, refueled, maintained, repaired in the USA, similarly contribute to USA's GDP.
The entire economic differences between similar USA or imported products cease when the products are under the jurisdiction of the USA governments and are being handled by the USA labor; (which includes non-citizens in the USA).

As imported products are being produced and/or processed by foreign entities, or being shipped to the USA on foreign carriers, they contribute nothing to USA's GDP. But when they “crowded” USA products out of our domestic markets, our chronic annual trade deficits reduced our annual GDPs.

International trades' entire increase of surplus trade nations' annual GDP, or reduction of trade deficit nations' GDP are actually understated by their nation's annual balance of trade. USA's annual trade deficits are the understated amount of our reduced GDP due to our negative balance of international trade.

Annual trade deficits are always net detrimental to their nation's GDP and drag upon their numbers of jobs. They indicate the nation has purchased more products than it produced. That's true during nations' good or poor economic years.
Respectfully, Supposn

I'm Supposn said:

James972, money is being transferred, but not (as you contend) taken “out of the economy”.

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you propose a tax to help the economy while Trump cut taxes and economy is booming. 1+1=2

I'm Supposn said:

The costs and benefits of producing or importing:

The expenditure formula itself only reduces or increases GDP by the nation's net trade balance which is based upon the dollar value of globally traded products. But there's often additional production supporting goods and services that are not fully paid for by product producers, and are not reflected within the products price valuation.

GDP cannot report what may have been produced if we did not experience a trade deficit, (i.e. a negative net balance of trade). Surpluses always increase, and trade deficits always decrease the amount of their nation's GDP more than otherwise.

The extent of global trades' actual effects upon their nation's annual GDP amounts almost always, (if not always) exceeds, and is never less than the extent of their nation's net global balance of trade.

For example, it's not unusual for governments and universities to boost local economies by providing producers with valuable research and development at lesser than market value or costs; government infrastructure that favors an important producer or industries; training and education tailored to serve a particular company or industry. These all increase their nation's GDP but if they are not reflected within the prices of exported products, exports full contributions to the nation's GDP are not attributed to the nation's global trade.

Respectfully, Supposn

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You are wrong, and given the number of times you have been corrected on this matter, you can't chalk it up to naivety.

DP = Consumption + Investment + Government Spending + Exports - Imports

Because imports have a negative sign in this equation, lots of people think that if imports go up, GDP (and therefore growth) goes down. But that’s not right. The reason, which every econ student ought to learn, is that imports also add to consumption, investment or government spending.

Suppose you’re living in Cleveland, and you buy a video game console made in Japan. Consumption goes up. But we don’t want to count that in GDP, since the console was made outside the U.S. So we subtract the value of the console. That’s why the “imports” term in the GDP component equation is negative. It’s just to avoid bad accounting. Similarly, if Intel Corp. imports a German machine tool, investment goes up, and we need to subtract the import to make sure GDP stays the same.

In other words, imports don’t count negatively in GDP. They amount to zero.

This means that a higher trade deficit doesn’t have to make the U.S. poorer. Imagine a situation where the U.S. keeps consuming and investing the same amount of domestically made goods, but starts exporting $1 billion more to foreign countries and importing $3 billion more. The trade deficit just went up by $2 billion dollars, but GDP went up by $1 billion! Growth was positive! The new imports didn’t change U.S. GDP, but the new exports added to it.

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The rest of the article can be found here. Hopefully these pathetic threads stop popping up in every single econ message board on the English speaking net.

James972 said:

There is no cost, only benefit, in importing for example bananas at $.05/LBS rather than producing them here in greenhouses at $10/LBS with high priced American labor. Do you understand?

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Yes, I understand. No Americans should work. Rather we all should buy cheap bananas paying with the money we all get from government. There is no reason for any American to work. The government just has to keep printing more money.

Thus, the advantage of imports is everything is free no matter what the price is because the government pays it - and no American would ever have to work. Do you understand?

joko104 said:

Yes, I understand. No Americans should work.

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No Americans should work growing bananas in USA greenhouses for $12.00/lbs when we can buy them at 10 cents /lbs. from a tropical country. Do you understand?

joko104 said:

Rather we all should buy cheap bananas paying with the money we all get from government.

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econ 101: we should buy cheap bananas and pay for them from jobs wherein we produce internationally competitive products. Do you understand?

joko104 said:

There is no reason for any American to work. The government just has to keep printing more money.

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printing money just inflates prices so is not an advantage. Do you understand?

joko104 said:

Thus, the advantage of imports is everything is free no matter what the price is because the government pays it

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govt pays? printing money raises prices it does not make anything free. Econ 101. Embarrassing

Kushinator said:

You are wrong, and given the number of times you have been corrected on this matter, you can't chalk it up to naivety.



The rest of the article can be found here. Hopefully these pathetic threads stop popping up in every single econ message board on the English speaking net.

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yes he should be banned for spamming!!!

Kushinator said:

You are wrong, and given the number of times you have been corrected on this matter, you can't chalk it up to naivety.

The rest of the article can be found here. Hopefully these pathetic threads stop popping up in every single econ message board on the English speaking net.

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Kushinator, excerpted from your provided link: “So we subtract the value of the console, [i.e.imported console from USA's GDP]. That’s why the “imports” term in the GDP component equation is negative. It’s just to avoid bad accounting”.
No it's not “just to avoid bad accounting”.

The conventional globally accepted expenditure formula for calculating nation's GDP reflects the nation's entire purchases of their domestic production. Trade surplus nation's net trade balance contributes to their GDP because although the products purchasers were not of their nation, the products sold were produced by their nation.

Trade deficit nation's net trade balances reduce their GDP because although the imported goods purchasers were of their nation, the products were not produced by their nation.

Those foreign goods “crowded USA goods from our markets. The dollars we spent for foreign products were not again spent for domestic products; had that been the case, there would not have been a trade deficit.

Annual trade deficits are always net detrimental to their nation's GDP and they drag upon their numbers of jobs. They indicate the nation has purchased more products than it produced.
A nation's net balance of trade understates the effect of the nation's international trade upon its net production. Trade surpluses' contributions and trade deficits' detriments to their nations' domestic production, exceed the amounts of their nations' net international trade.

Respectfully, Supposn

This conversation is off the rails... again.

Not every import or export is a finished product, not every source or destination nation has a internal method and business means to deal with a source product or finished product, not every nation is at the same point in terms of manufacturing ability anyway, and finally not every product is entirely made in a single nation.

This is all aside from the reality that not every nation is at the same point in terms of economic or social or governmental understandings meaning the cost of living and cost of labor nation to nation is vastly different.

Despite the hype, and despite a horribly edited Wikipedia article, not every single nation can source all the products they need as both sources for or finished products all on their own. This is true of foods, raw materials, natural resources, methods of and point of industrialization, etc.

This is why trade between cultures and nations has been going on for thousands of years.

So now back to a nation's GDP.

Ever since this nation has been this nation we have imported and exported products, the *issue* is our more modern economy has become dependent on importing products to the point that our GDP math (the actual numbers) for net exports is a negative number. When we add up private consumption (C,) gross investment (I,) government spending (G,) and net exports (Ex - Im) the last item ends up being a negative number.

The question is what, if anything, do to about the negative number in the GDP math. The problem is dealing with a few realities of messing with this, and just about everything thought up to date ends up as a cost passed onto the consumer. No matter if a tariff, or a non-specific tariff (like an Import Certificate,) or some other cost penalty the assumption is domestically all of those impacted source or finished products can be completely handled domestically. It also assumes that all other economic and market factors stay constant. Neither assumption is accurate, at least in the short term. This is all made worse by the reality that some of our finished goods are made from imported raw materials or other source products, so any sort of cost increase to a imported product in that chain impacts the costs for the final product.

It took time to become a net importer or goods, it will take time to shift away from that model assuming our economic model needs to. A tariff or Import Certificate does not address the underline issue of our economic model, as such going with either one (which when applied does the same thing) causes economic turbulence. Even if applied to an apples to apples comparison of a product we can complete assume to be sourced and made here it is still an aggregate shift in costs (the cost of making it here or deal with the penalty of importing it here.) Our markets have traditionally never reacted well to immediate cost increases and as such we see violent movement in terms of supply and demand.

An Import Certificate is just as dumb as a tariff, the US is not in a closed economy. In fact, we never have been in a closed economy nor should we.