Mind Buffett, Don’t Panic

This is an explanation of Warren Buffett's proposal to significantly decrease USA's trade deficits. His article entitled "squanderville" was published by Fortune magazine in October 2003.

If exporters of goods from the USA choose to pay a fee to defray US custom's expenses, their goods will be assessed and transferable IMPORT Certificates for that assessed value will be issued to them. (If exporters don't choose to pay, their goods leave the USA unassessed and thus no certificates are issued).

Importers would be required to surrender IMPORT Certificates for the assessed value of their goods entering the USA. Surrendered certificates are cancelled. The exporter's motivation is to profit from the sale, trade or use of the transferable IMPORT certificates.

Unlike a tax or tariff, the fees will not be a net source of government revenue. They're to fund the government's assessment and certificate issuing expenses. The market driven proposal grants government no discretion of policy. (Assessing the value of goods is a technical, not a policy decision). It will increase rather than decrease USA's aggregate sum of imports plus exports. It is fully self-funding. Decreasing USA's trade deficit would increase our GDP and median wage. Buffett's proposal would be a restriction upon pure free trade but it is certainly pure free enterprise.

USA consumers can continue to enjoy cheap (but not the absolute cheapest) imports and annual median wages that are (after adjustment for inflation) still significantly greater. I'm aware of no existing or proposed trade policy that could accomplish this with less government intervention or less increased prices of imported goods. The proposal's simple logic is irrefutable.

Jim Hightower said, "We should keep our factories here and import our CEO's. They'll perform the same tasks for less money ".

From the CIA Fact book, (2004), a United States Government publication: "(USA's economic) Long-term problems include inadequate investment in economic infrastructure, rapidly rising medical and pension costs of an aging population, sizable trade and budget deficits, and stagnation of family income in the lower economic groups"

For further information refer to
www.USA-Imports.Blogspot.com

Respectfully, Supposn

Warren Bufffet published a proposal yo significantly decreas USA's trade deficit of goods.

A nation's annual trade deficit indicates some foreign production were substituted for potential domestic production. Their gross domestic production, (their GDP) was less than otherwise.

The trade deficit's detriment to the GDP exceeds the amount of the deficit itself and is detrimental to the median wage. Trade deficits are always a net economic detriment to the nation.

When local producers have perceptively modified a community's volume of production the resonating production modification to the community by other producers becomes obvious. This often affects producers of completely unrelated products; (i.e.; factory production affecting beauty parlor production). This modification of the community's gross production of course affects local jobs and their wage rates.

This same phenomenon occurs when the initial catalytic producers were small but acting in concert. (That's often the case within single or allied industries). On a national scale this is all generally dispersed and thus less obvious but no less real.

For over a half century USA's continuously increasing annual trade deficit has been such a significant catalyst. Our annual GDPs and median wages have been less than otherwise due to our pursuit of pure unrestricted free trade (among nations that are unwilling and/or unable to sufficiently compensate their laborers).

Our trade deficit's net detriment to USA's economy is greatly under-estimated by those influential within and outside of our government; (because its affect upon the median wage is proportionately more burdensome to lower income families)?

A brief desciption of Warren Buffwett's proposal to significantly decrease USA's trade deficit will follow within my next message. A more comple discussion of it can found
within www.USA-Imports.Blogspot.com .

Respectfully, Supposn