Reduce the trade deficit; increase GDP & median wage

[Supposn]

Trade deficits are always detrimental to their nations’ GDPs.

Trade surpluses’ contributions or trade deficits’ detriments to their Nation’s GDPs are always understated.

Non-exported products that enabled production of export products but weren’t reflected within prices of any exported products cannot be identified.
For example prices of goods often do not FULLY reflect the portions of infrastructure, research and development expenditures that supported the production of those goods. Such support provided by government agencies or other non-profit entities in particular are generally not fully reflected within the prices of the goods.

The extent that production of exported products also enabled or induced additional production of products not exported and thus not identified as related to global trade.
For example increased production of exported products may increase production of local beauty parlor service products.

Unidentified production due to, but not reflected within export prices understate trade surpluses' contributions to their nations’ GDPs.

USA’s trade deficit denied our nation the production of the products we imported. That’s why trade deficits are negative terms within GDP calculations. To the extent that production of goods and service products were not reflected within the prices of USA’s imports, we additionally denied ourselves the infrastructures, the research, development and experience that supported and/or were derived from the production of USA’s imports.

The direct and indirect benefits due to the production of USA imports and all of the jobs associated to these productions fully contributed to the nations that produced USA’s imported products. USA’s trade deficits understate our trade deficits’ detriments to our annual GDPs.

Refer to: www.USA-Trade-Deficit.Blogspot.com
or http://en.wikipedia.org/wiki/Import_Certificates
or http://en.wikipedia.org/wiki/Gross_domestic_product
or Google: wikipedia, import certificates
or Google: wikipedia, gdp

Respectfully, Supposn

 

[Supposn]

..... It is not the trade deficit that is the problem. The deficit is the symptom of the underlying cause.

Dr. Who, the trade deficit is not a symptom; it’s a statistical description of the problem.

..... There are many solutions for when the competition makes a cheaper product but trying to coerce buyers to choose your product is not the answer. I suggest we make products that are too hard to ship from there to here. Or that we make superior products. Whatever we do we need to find our niche in the market. Of course we could just lower our wages which is exactly what is happening indirectly as the value of our dollar does down.

[Excerpted from chapter 25 of the Biblical book of Genesis:
And Jacob said, Swear to me this day; and he swore unto him: and he sold his birthright unto Jacob.
Then Jacob gave Esau bread and pottage of lentils; and he did eat and drink, and rose up, and went his way: thus Esau despised his birthright].
///////////////////////

[The United States became the world’s greatest producer of goods. The “arsenal of democracy” was a vital factor of the Second World War’s outcome and USA’s extraordinary post- war economy. That economy funded the Marshall Plan that significantly contributed to Europe's post-war recovery. (It should be noted the plan was funded by ALL taxpayers; our trade deficit’s detriment to our GDP is primarily the financial burden of U.S. wage and salary earning families)].

Dr. Who, why are you so despising our children’s' and grandchildren’s' birthrights of the great producing nation you and I enjoyed?

You would continue the detriments to USA’s annual gross domestic products and significantly sacrificing the finances of our wage earning families until we reach wage parity with the remainder of the world? If and when that occurs, isn’t it likely that U.S. wages will plunge to a greater extent than the increase of foreign wages?

If the U.S. Congress should determine we continue being charitable, the burden should not be primarily borne by wage earning families.

Respectfully, Supposn

 

[GenSeneca]

Dr. Who, why are you so despising our children’s' and grandchildren’s' birthrights of the great producing nation you and I enjoyed?

We would have to despise our children and grandchildren to put them through the misery of protectionist trade policies.

Dr. Who, the trade deficit is not a symptom; it’s a statistical description of the problem.

Buffets plan is insane, he is looking to address the symptom... Oops, I mean the "statistical description of the problem" rather than the problem itself.

If you really wanted a solution to the trade deficit, you would begin by looking at why US products are not as competitive in the world market and then look for ways to remove impediments to US companies to make our products more competitive. We could start by lowering the corporate tax rate 30 points, eliminating economic laws and regulations that do not protect the public from force and fraud, opening up America's natural resources (especially our oil reserves in Alaska and the Gulf), and stop subsidizing foreign goods with US aid money.

Instead, you are looking at ways to change the "statistical description of the problem" by limiting imports and enacting laws to manipulate economic behavior through the force of government. Yes, our imports would drastically fall and our exports would drastically rise but that always happens during heavy economic recessions, which is exactly what the Buffet plan would accomplish. You're not even trying to make America more competitive with the rest of the world, you're only trying to keep the competition out of America. It's lunacy.

 

[Supposn]

Re: This proposal's market rather than government driven.

............ And if we do fix them why should we do it in a way that rewards exporters? It is not supposed to be American way to favor one group of people over another.

Dr. Who, this may seem as a boon to exporters of USA goods but it’s actually an indirect and effective export subsidy.

Due to other competing exporters of U.S. goods and negotiating pressures from their foreign customers, Exporters of U.S. goods have sufficient cause to reduce their prices. Despite or because of the induced lower prices for U.S. exports, everyone’s a winner. The sales volumes of U.S. goods producers and/or, exporters, increase as does the nation’s exports and GDP.

There’s no doubt that exporters entitlement to pay a comparatively nominal fees to acquire the Import Certificates is advantageous but I suppose anyone or anyone’s agent can function as an exporter of U.S. goods. It’s not a heredity title or an exclusive social club.

I’m aware of no existing or other proposed trade policy that could eliminate USA’s trade deficit of assessed goods with less additional cost to U.S. purchasers of foreign goods and to U.S. taxpayers. All expenses due to this trade proposal are eventually and entirely paid by the U.S. purchasers of foreign goods.

I’m aware of no existing or other proposed trade policy that could eliminate USA’s trade deficit of assessed goods and subsidize U.S. exports more cost effectively and with less government intervention.

Respectfully, Supposn

 

[Supposn]

If you really wanted a solution to the trade deficit, you would begin by looking at why US products are not as competitive in the world market and then look for ways to remove impediments to US companies to make our products more competitive. We could start by lowering the corporate tax rate 30 points, eliminating economic laws and regulations that do not protect the public from force and fraud, opening up America's natural resources (especially our oil reserves in Alaska and the Gulf), and stop subsidizing foreign goods with US aid money.

enSeneca,

when Maytag relocated their refrigeration manufacturing from Illinois to Mexico, it was not to produce better refrigerators. Mexicans didn’t make it faster or better; they made it cheaper.

Maytag’s payroll went from $16/Hr to $2/Hr. If Maytag refrigerators are now or in the near future not outsourced from China, it is or will only be due to Mexico, (unlike the USA) not squandering their manufacturing industries.

If the workers could have accepted wage rates below the federal minimum and the governments' could have waived all their reasonable and less reasonable government regulations and waived their taxes, Maytag would still have had to move. You can’t beat $2/Hr.

But the workers cannot live in Illinois at below the federal wage rate and all levels of government need their revenues and government regulations have beneficial purposes that are often delivered. You’re not satisfied with things as they are but you fear to consider change?

Respectfully, Supposn

 

[GenSeneca]

You’re not satisfied with things as they are but you fear to consider change?

I just suggested "change"...

The plan you advocate in no way makes American companies more competitive with the rest of the world, it only limits the rest of the world from competing in our domestic market. The other countries of the world will respond in kind and enact their own protectionist policies to punish US companies for our government's decision to prevent competition.

India is one of America's biggest importers, we send billions worth of goods to India every year and purchase very few of their exports. With a middle class in India numbering 350 million, more than the entire polulation of the US, India is a considerable market for US goods. The PM of India is aware of the kinds of protectionist trade policies you're advocating and has stated that India would respond by dramatically limiting American imports to his country. As I have said, the plan you advocate is insane, it will hurt Americans, hurt and enrage our trading partners, and benefit nobody.

 

[Supposn]

I just suggested "change"...

The plan you advocate in no way makes American companies more competitive with the rest of the world, it only limits the rest of the world from competing in our domestic market. The other countries of the world will respond in kind and enact their own protectionist policies to punish US companies for our government's decision to prevent competition.

India is one of America's biggest importers, we send billions worth of goods to India every year and purchase very few of their exports. With a middle class in India numbering 350 million, more than the entire polulation of the US, India is a considerable market for US goods. The PM of India is aware of the kinds of protectionist trade policies you're advocating and has stated that India would respond by dramatically limiting American imports to his country. As I have said, the plan you advocate is insane, it will hurt Americans, hurt and enrage our trading partners, and benefit nobody.

GenSeneca, what are you writing about? The USA suffers a significant proportional trade deficit with India. Refer to:
http://www.census.gov/foreign-trade/balance/c5330.html

You do not accept what's based upon the accepted conventional GDP definition and formulas for GDP calculation, that leading to the conclusion of trade deficits being ALWAYS detrimental to their nations' GDPs.

[As you pointed out, during periods of hyperinflation or hyper depression the values of goods expressed in the “erratic” currency are changing extremely fast.
The balance of trade is thus changing too fast and can be determined only if it’s calculated using other than the erratic currency].

The logical mathematical conclusion rather than a more subjective conclusion, (i.e. an opinion) is trade deficits are ALWAYS detrimental to their nation’s GDP.

You reject that conclusion. There’s no reason to discuss any additional fallacies or contradictions within the remainder of your message because you’re absolutely satisfied with our seeking pure free trade.

Respectfully, Supposn

 

[GenSeneca]

GenSeneca, what are you writing about? The USA suffers a significant proportional trade deficit with India. Refer to:
http://www.census.gov/foreign-trade/balance/c5330.html

While it doesn't happen often, it does happen... I stand corrected as to the trade deficit with India. However, I still do not see our trade deficit as a problem.

Now as for your solution to our trade deficit, if you found a way to reduce our trade deficit by making America more competitive in the world markets, I would probably support the initiative but that's not what you're proposing at all. Instead, you're only trying to limit our competition's ability to sell goods on the US market. That's not a plan to increase GDP & median wages, that's economic suicide.

 

[Hobo1]

Here is another problem. The genuine iPhone is hugely popular, and availale throughout the world. Here is who manufactures the iPhone:

Software and design Apple USA
Assembly Foxconn?, Quanta, Unknown Taiwan
TFT-LCD Screen Sanyo Epson, Sharp, TMD Japan
Video processor chip Samsung Korea
Touch screen overlay Balda Germany
Bluetooth chip Cambridge Silicon Radio UK
Chip manufacture TSMC, UMC Taiwan
Baseband IC Infineon Technology Germany
WIFI Chip Marvell USA
Touch screen control chip Broadcom USA
CMOS chip Micron USA
NOR Flash ICs Intel, SST USA
Display Driver chip National Semi, Novatek US, TW
Case, Mechanical parts Catcher, Foxconn Tech Taiwan
Camera lens Largan Precision Taiwan
Camera module Altus-Tech, Primax, Lite On Taiwan
Battery Charger Delta Electronics Taiwan
Timing Crystal TXC Taiwan
Passive components Cyntec Taiwan
Connector and cables Cheng Uei, Entery Taiwan​

Now how are you going to give out import and export certificates to this group?

 

[Supposn]

Trade deficits are always detrimental to their nations’ GDPs.

..............Now as for your solution to our trade deficit, if you found a way to reduce our trade deficit by making America more competitive in the world markets, I would probably support the initiative but that's not what you're proposing at all. Instead, you're only trying to limit our competition's ability to sell goods on the US market. That's not a plan to increase GDP & median wages, that's economic suicide.

GenSeneca, there’s no doubt that this proposal mandates an additional restriction upon imports but it does not actually limit the volume of U.S. imports. It certainly would eliminate all USA assessed trade deficits of goods.

The proposal mandates that all imported goods be assessed and the importer surrender Import Certificates with “face values” that cover the assessed values of their goods. This proposal incidentally mandates nothing else of those bringing goods to or from the USA.

The proposal would certainly and significantly increase USA’s GDP. This would in turn certainly be beneficial to the creation of jobs and to our median wage.

There doesn’t seem anything else I can add to this discussion that goes beyond my previous message, (#22).

Respectfully, Supposn

 

[GenSeneca]

Re: Trade deficits are always detrimental to their nations’ GDPs.

GenSeneca, there’s no doubt that this proposal mandates an additional restriction upon imports but it does not actually limit the volume of U.S. imports. It certainly would eliminate all USA assessed trade deficits of goods.

The plan is to limit imports based on the dollar amount of exports. So if we export $15 billion worth of products, $15 billion worth of IC's would be created, and foreign countries would be limited to a maximum amount of $15 billion worth of imports to the US. The idea being that limiting domestic imports to a dollar amount equal to the dollar amount of our exports will result in a statistical balance of trade.

But you just claimed IC's wouldn't restrict the volume (i.e. quantity) of US imports... If the quantity of current US imports equals $25 billion and IC's restrict importers to $15 billion worth of imports, then imports actually would be limited in the "volume" of imports because they could not exceed $15 billion worth of goods, leaving $10 billion worth of goods unable to enter America.

The proposal mandates that all imported goods be assessed and the importer surrender Import Certificates with “face values” that cover the assessed values of their goods. This proposal incidentally mandates nothing else of those bringing goods to or from the USA.

Again, as I read the plan, IC's are created by the US exporting goods. So when I export $1 worth of goods, I get an IC worth $1 worth of imports, which I then sell to the highest bidder who uses that IC to import $1 worth of goods to the US.

If that is not how the plan is supposed to work, then it makes even less sense than I thought.

The proposal would certainly and significantly increase USA’s GDP.

Not by making the US more competitive with the rest of the world, only by rigging the system to make sure the value of our imports do not exceed the value of our exports.

This would in turn certainly be beneficial to the creation of jobs and to our median wage.

You keep making this claim but you do not explain how A leads to B leads to C.

The plan will increase the cost of goods sold in America. That forces Americans to spend more money in 2012 to purchase the exact same goods they purchased in 2011, doesn't sound like a plan that creates jobs or increases the median wage. This plan would have the same effect as inflation, a dollar in 2012 would have less purchasing power than it did in 2011, making every American that much poorer. So explain how a plan that increases the cost of goods in America will create jobs and increases the median wage.

There doesn’t seem anything else I can add to this discussion that goes beyond my previous message, (#22).

You say the same thing every time...

Supposn, "This plan will reduce the trade deficit, which will raise GDP, create jobs, and increase the median wage."

GenSeneca, "Explain how A leads to B leads to C leads to D."

Supposn, "This plan will reduce the trade deficit, which will raise GDP, create jobs, and increase the median wage."

GenSeneca, "That doesn't explain anything."

Supposn, "I've already explained it. This plan will reduce the trade deficit, which will raise GDP, create jobs, and increase the median wage."

 

[Supposn]

HOBO91, what did you mean when you asked “Now how are you going to give out import and export certificates to this group”?

You did not read the first message of this discussion thread
or the second message of www.USA-Trade-Deficit.Blogspot.com ;
or http://en.wikipedia.org/wiki/Import_Certificates ;
or Googled: wikipedia, import certificates ?

You would understand (if you had read any of those items) that under this trade proposal:

(A) No one GIVES Import certificates to anyone.

Exporters of U.S. goods may choose to pay the federal assessment fees that (initially) fund all of federal expenses due to this trade proposal. It’s the U.S. purchasers of foreign goods that eventually pay all of those expenses.

Only the exported goods of those who choose to pay those federal fees will have their goods assessed. Transferable Import Certificates, (ICs) are only issued to exporters of goods shipped out from the USA, and the “face value” of those ICs are for the goods assessed values.

(B) There’s no such thing as an “export certificate”.


Respectfully, Supposn

 

[Supposn]

Trade deficits are always detrimental to their nations’ GDPs.

GenSeneca, with my best efforts I’ve strived to explain why and how global trade deficits are detrimental and surpluses contribute to their nations’ GDPs. Additionally I’ve explained how and why nations’ global trade imbalance amounts to significant extents understate their affects upon their nations’ GDPs. Due to the conventionally accepted definition and calculation of GDP, the logical mathematical conclusion rather than a more subjective conclusion, (i.e. an opinion) is trade deficits are ALWAYS detrimental to their nation’s GDP.

Thus even if you should accept that GDP’s as a direct aggregate or per capita indicator of the nation’s economic condition, you reject the concept of nations’ global trade imbalances affecting their GDPs. This rejection logically leads you to reject global trade deficits’ detriments to their nations’ economies.

Due to these afore mentioned rejections there’s no reason or point to discussing (with regard to nations’ global trade imbalances), the additional fallacies or contradictions within the remainder of your messages.

You’re absolutely satisfied with our seeking pure free trade.

Respectfully, Supposn

 

[GenSeneca]

Re: Trade deficits are always detrimental to their nations’ GDPs.

GenSeneca, with my best efforts I’ve strived to explain why and how global trade deficits are detrimental and surpluses contribute to their nations’ GDPs.

I understand the statistical relationship between trade deficits and GDP.

Additionally I’ve explained how and why nations’ global trade imbalance amounts to significant extents understate their affects upon their nations’ GDPs.

No, you've just said, 'a nations global trade imbalance amounts to significant extends understate their affects upon their nations GDP.'

That's not an explanation of anything. It doesn't even make grammatical sense... It's total gibberish.

Due to the conventionally accepted definition and calculation of GDP, the logical mathematical conclusion rather than a more subjective conclusion, (i.e. an opinion) is trade deficits are ALWAYS detrimental to their nation’s GDP.

Yes, statistically speaking and according to the conventionally accepted definition and calculation of GDP, trade deficits always subtract from a nations GDP... Outside the realm of statistics, you have offered no explanation as to why a trade deficit is bad:

Personal level: "Inconsequential"
City level: "Inconsequential"
County level: "Inconsequential"
State level: "Inconsequential"
National level: "Detrimental"

Q. Why do you consider a national trade deficit detrimental?
A. Because, statistically, it counts against the nations GDP.

Q. Well the same is true if you calculate GDP on all the other levels, why are they "inconsequential"?
A. Because the other levels do not control trade policy.

Q. So if trade policy were not set at the national level, the national trade deficit would become "inconsequential"?
A. Due to your rejections there's no point in discussing the additional fallacies or contradictions within the remainder of your messages.

Thus even if you should accept that GDP’s as a direct aggregate or per capita indicator of the nation’s economic condition, you reject the concept of nations’ global trade imbalances affecting their GDPs.

Totally false. I understand that, statistically, a trade deficit counts against a nations GDP. What I reject is the unsubstantiated claim that trade deficits are somehow bad outside the realm of statistics.

This rejection logically leads you to reject global trade deficits’ detriments to their nations’ economies.

Where do the benefits of a trade deficit factor into the conventionally accepted definition and statistical calculation of GDP?

I know for a fact that my ability to purchase foreign goods cheaper than domestic goods greatly adds to my standard of living, yet there is no statistical device within the "conventionally accepted definition and calculation of GDP" that even attempts to consider my improved standard of living as a result of our trade deficit.

Due to these afore mentioned rejections there’s no reason or point to discussing (with regard to nations’ global trade imbalances), the additional fallacies or contradictions within the remainder of your messages.

I must have struck a cord by pointing out that the Buffet plan does absolutely nothing to increase America's ability to compete in the global market because you are just doing everything you can to avoid admitting that inconvenient truth.

 

[Supposn]

Trade deficits are always detrimental to their nations’ GDPs.

GenSeneca, English grammar is not my forte and the hour’s too late for me to consult anyone I believe is knowledgeable of grammar. I’ve reread “Additionally I’ve explained how and why nations’ global trade imbalance amounts to significant extents understate their affects upon their nations’ GDPs”.

It’s not excellent prose and I find it to “wordy” but it sounds to my ear as proper English; but hat’s an opinion of someone not very knowledgeable of grammar.

I’ll try to have the thought rewritten by someone else but I doubt if that will remedy your depreciation of global trade imbalances’ affect upon their nations’ GDPs or your depreciation of GDPs’ indication of their nations’ aggregate economic condition.

To summarize:

Trade surpluses contribute and deficits are detrimental to their nations’ GDPs.

Global trade imbalance amounts are significantly less than their affects upon their nation’s GDPs and GDPs signify the conditions of their nations’ economies.

You fault my explanations over many previous messages as not being sufficiently simple and I fault your lack of comprehension as due to your not striving to understand. Possibly your ideology and these concepts are so contrary to each other that you’re unwilling to understand.

There’s no reason or point to continue our discussing (with regard to nations’ global trade imbalances), the additional fallacies or contradictions within the remainder of your messages.


Respectfully, Supposn