by Respectfully - Supposn

Created on: February 14, 2009

This is an explanation of a proposal to significantly decrease USA's trade deficit. The concept written by Warren Buffett was published in 2003.

Trade deficit's detriment to the GDP greatly exceeds the amount of the deficit itself. Anything detrimental to the GDP is also detrimental to the median wage. The GDP and median wage are among, (if not the very most) significant economic indicators.

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, the goods leaving USA are not assessed and thus no certificate is 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.

Assessment of exports from the USA must be adjusted to exclude the value of their integral precious, rare or scarce mineral materials. Otherwise the proposal's entire purpose would be greatly evaded.

[It's not absolutely necessary but suggested that we make the same adjustment for import assessments so our assessment methods remain consistent. Such consistency would not be economically significant but its absence could cause much mischief. It's also been suggested that petroleum be added to that precious and scarce minerals list. There's no reason to encourage oil exports and inducing higher gas pump prices would certainly be unpopular.].

This is proposal to decrease USA trade deficit. Rather than limit, it would lead to increasing the aggregate total of our imports plus exports more than otherwise. We now predominately just buy goods. Under this proposal cargo ships would not be leaving USA ports almost empty. Our trade deficits detriment to Our GDP far exceeds the amount of the deficit itself. Anything harmful to the GDP is harmful to our median wage.

This self-funding proposal is market rather than government driven. No other existing or proposed policy could accomplish all of this with less government intervention or less increased prices of imported goods. The trade deficits detriment to the median wage far exceeds wage earning families' benefits from cheaper foreign goods. We can have both cheaper goods and higher wages but not the absolutely cheapest goods; they are no bargain.

Refer to www.USA-Trade-Deficit.Blogspot.com
and www.USA-Imports.Blogspot.com

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