The free trade debates, like a lot of disagreements, rely on certain assumptions and definitions. The problems are often due to the contestants working off differing perceptions of the key factors involved.
In my lifetime I believe the only truly free trade has been that in the black market. My son was in the Soviet Union with his high school class in 1980. In this most governmentally structured economy the currency was ignored by Rusian teens wanting Levis, news magazines and Elvis recordings. An illegal black market economy set the prices along with supply and demand.
It’s a lot like saying the death penalty doesn’t work. If someone holds a gun to your head and says, ” If you do that I’ll kill you.” The effect of imminent death is likely to be quite a lot more effective than if you assume you’ll spend decades on death row
Posted by whattheheck on Jul 4, 2008 at 12:45 PM
This is an explanation of Warren Buffett’s proposal to significantly decrease USA’s trade deficit.. His article, “Squanderville” was published in October, 2003 by Fortune magazine.
If exporters of goods from the USA choose to pay a fee to defray the USA government’s expenses, their goods will be assessed and transferable IMPORT Certificates, (ICs) equal to the assessed value of their goods will be issued to them. If an exporter should decline to pay the fee, their goods leave the USA unassessed and no ICs are issued. The exporter’s motivation is to profit from the sale, trade or use of the certificates.
Importers would be required to surrender ICs for the assessed value of their goods entering the USA. Surrendered cetificates are cancelled.
Unlike a tax or tariff, the fees will not be a net source of government revenue. Their only purpose is to completely fund all the expenses of this proposal. The market driven proposal grants government no discretion of policy; (Assessment of goods is a technical rather than a policy determination). The proposal will increase the aggregate sum of USA’s imports plus exports. Decreasing USA’s trade deficit in this manner will increase both our GDP and median wage in “real” dollar amounts (fully reflecting the U.S. dollar’s purchasing power).
Buffett’s proposal is a restriction upon “pure” free trade but the market rather than government driven proposal’s pure free enterprise.
USA would still enjoy cheap, (but not the absolute cheapest) imported goods, increasing real GDP and real wages. I’m aware of no other existing or proposed trade policy that could be superior to what Buffett proposed.
For further information refer to www.USA-Imports.Blogspot.com
Respectfully, Supposn
Posted by supposn on Jul 28, 2008 at 3:24 PM
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Reader Comments
The free trade debates, like a lot of disagreements, rely on certain assumptions and definitions. The problems are often due to the contestants working off differing perceptions of the key factors involved.
In my lifetime I believe the only truly free trade has been that in the black market. My son was in the Soviet Union with his high school class in 1980. In this most governmentally structured economy the currency was ignored by Rusian teens wanting Levis, news magazines and Elvis recordings. An illegal black market economy set the prices along with supply and demand.
It’s a lot like saying the death penalty doesn’t work. If someone holds a gun to your head and says, ” If you do that I’ll kill you.” The effect of imminent death is likely to be quite a lot more effective than if you assume you’ll spend decades on death row
This is an explanation of Warren Buffett’s proposal to significantly decrease USA’s trade deficit.. His article, “Squanderville” was published in October, 2003 by Fortune magazine.
If exporters of goods from the USA choose to pay a fee to defray the USA government’s expenses, their goods will be assessed and transferable IMPORT Certificates, (ICs) equal to the assessed value of their goods will be issued to them. If an exporter should decline to pay the fee, their goods leave the USA unassessed and no ICs are issued. The exporter’s motivation is to profit from the sale, trade or use of the certificates.
Importers would be required to surrender ICs for the assessed value of their goods entering the USA. Surrendered cetificates are cancelled.
Unlike a tax or tariff, the fees will not be a net source of government revenue. Their only purpose is to completely fund all the expenses of this proposal. The market driven proposal grants government no discretion of policy; (Assessment of goods is a technical rather than a policy determination). The proposal will increase the aggregate sum of USA’s imports plus exports. Decreasing USA’s trade deficit in this manner will increase both our GDP and median wage in “real” dollar amounts (fully reflecting the U.S. dollar’s purchasing power).
Buffett’s proposal is a restriction upon “pure” free trade but the market rather than government driven proposal’s pure free enterprise.
USA would still enjoy cheap, (but not the absolute cheapest) imported goods, increasing real GDP and real wages. I’m aware of no other existing or proposed trade policy that could be superior to what Buffett proposed.
For further information refer to www.USA-Imports.Blogspot.com
Respectfully, Supposn
A trade deficit is detrimental to a nation
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