Reduce the trade deficit; increase GDP, jobs and median wage

[exploited]

CATO is a joke, it's known. Everything that they do is motivated by ideology, and they produce nothing but the most reprehensible "studies" imaginable. These guys want to abolish the NASA, Social Security, the USPS, the TSA, all public transportation systems, all public broadcasting, the minimum wage, overtime, unions, child labor prohibitions, universal health care, and every single program that is part of the "welfare system." They are, in other words, libertarians and objectivists - which says all you need to know about the quality of their work.

[NAB]

[spacemonkey]

[JockandBallTorture]

Import certificate policy is a very Trump thing now. Even Warren Buffett has reversed his attitude about the American economy from 13 years ago. Hathaway Mills would have benefited in the short-term from the policy of import certificates.

The policy was discarded and died because of the potential for deadweight loss. The byproduct would've been jobs and a short-term immediate boost to the GDP from the import and export differential. But what about the long-term? At the least in the long-term it would have detrimental effect on the value of the host nation's currency. Deflation. Hmm.

Let's talk about what the trade deficit isn't: it is not an accrued cost that will be collected, it is not the national debt, it does not include tourism, services, and the domestic economic activity generated by imports. It is a very slight part of GDP. There are other very significant parts of the GDP equation and the order of magnitude between the GDP and the trade deficit is evidence enough to show the productive means are being maintained.

The idea that import certificates will generate jobs in the short-term does not guarantee these type of job are sustainable. But it does guarantee that production will be the inefficient type of production of goods openly available on the global market. Hathaway Mills would have gone out of business eventually due to the cost of labor, the cost of production, technological innovation, and the relative quality of the intermediate good produced.

Technological innovation and the use of imports to generate GDP through goods and services negate the need for an import certificate policy. Attention will always need to be paid to the means of production and the health of the domestic economy. People often cite the eroding of the American manufacturing base and destruction of middle-class jobs when they talk about international trade. Automation is doing this anyway.

So if the right question is not, how do we stop the rain? (Trade)

The right question would be, what do we do with all this water? (Imports)

[IndependentProfessor]

[John Galt]

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[Supposn]

[Supposn]

Import Certificate policies affects upon competition:

Josh, the Import Certificate proposal does not reduce competition among any industries if we consider importing and exporting as a single global trade industry. Similarly it doesn’t discriminate among enterprises or among foreign nations or foreign pacts.
It does not eliminate all existing foreign goods’ advantages that may or will exist to the disadvantage of USA produced goods.

HOWEVER the Import Certificate proposal does somewhat reduce the advantages of foreign goods sold in the USA. Those advantages are most often due to the lesser wage scales of foreign labor hours. Regarding superior quality of a foreign product, the quality of a product is often related to the cost of labor integral to the products total price.
The per unit reduction of imported goods price advantage is relative to the goods U.S. dollar value within the USA and the extent of that reduction is much more due to market rather than to U.S. federal determinations.

There's effectively no significant reduction of competition but the Import Certificate policy does to an extent reduce the advantage of imports from low-wage nations.

Respectfully, Supposn

[Philly]

[Supposn]