by Respectfully - Supposn

Created on: January 03, 2008   Last Updated: June 26, 2008

Due to the economic concept of comparative advantage global trade itself is beneficial to all participating nations. Trade deficits are detrimental to a nation's economy. An aggregate long term global trade deficit is certainly detrimental.

USA's trade deficit is more detrimental to wage earners. Capital portable, labor is much less so. It is not economically, financially or politically feasible for large segments of USA wage earners to find employment outside the United States. Unemployment is only the most extreme case of under-employment.

Under-employment is the condition of laborers unable to work at tasks for which they are capable and desire to perform. Labor's motivation is generally to earn the greater income, but it may also be due to other enticement such as an artist's personal satisfaction.

I certainly do not advocate labor's employment entitlement of jobs to produce goods for which there's no demand but what of goods that USA purchasers do demand? What of goods lower production cost due to currency manipulation or foreign nation's unwillingness or inability to grant their workers what we in the USA perceive to be reasonable compensation and working conditions?

Other nations should not intervene within USA's domestic affairs, and similarly we should not mess with theirs. The world's and the USA's production and consumption of goods continue to increase. The proportion of USA goods consumed both within the USA and the entire globe has continued to decrease for a half century.

Warren Buffett wrote of a proposal to significantly decrease USA's trade deficit of goods. Fortune magazine published it in 2003. I'm aware of no other existing or proposed trade policy that could or would induce greater increase of our nation's GDP and median wage.

Warren Buffett's proposal is not a tax. It's self funding, denying funds to no other proposal for national improvement. The proposal grants government no discretion of policy. (Assessment of goods is a technical rather than a policy determination). The market (rather than government) driven trade proposal would accomplish this with less government intervention or increased import prices (than any other trade policy). The USA can export goods rather than jobs and still enjoy cheap, (but not the absolutely cheapest) imported goods.

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