Reduce the trade deficit; increase GDP & median wage

myp said:

Are you really telling me that you see no other benefit in GDP as a result of imports? Fine. I will give you an example- if say tomatoes are cheaper to import than buy locally a business that makes tomato soup may be able to produce more tomato soup at a lower cost, which adds to GDP. It is possible that said extra production of tomato soup adds MORE to GDP than the import cost was, hence adding a net GDP benefit. And don't say this is my opinion- it is proven and all major schools of economic thought accept it. I am not going to argue that with you- there is plenty of reading on that out there. That cheaper made tomato soup might then sell for less on the market, so consumers have extra spending money to spend on other things- yet another benefit. One of millions of such examples.

By saying that imports have no other benefit to GDP (and using GDP as a primary utility measurement) you are essentially saying that 0 imports would be the ideal situation. Clearly this is not true. History has proved it time and time again with the free trade markets generally being a lot more prosperous than the protectionist ones. By saying this about imports you are also denying the empirical data and proven logic behind comparative advantage and trade.

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MVP, yes it is possible that increased production of tomato soup can be responsible for a net increase of the nation?s GDP; it might finally be of no consequence to the GDP; it might in final analysis be indirectly detrimental to the GDP.


If the tomato prices increase sufficiently to affect USA tomato soup prices, ultimate purchasers will purchase other soups, or do without soup or pay the additional price.


If they balk at the increased price and purchase other soups, the GDP is not decreased.


If they pay the increased price and economize by reducing purchases of other products, (I agree that their life style has been reduced, but) the GDP is not decreased.
(This is the reason that comparison statistics over the years should be expressed in annually cost of living adjusted dollars).


If they pay the increased price and do not reduce purchases of other products, the GDP is increased.


The GDP will be reduced if they balk at the increased price and reduce their purchase of other products.

Respectfully, Supposn

MVP, you?re correct to believe an economy is similar to a complex organism and relationships of individual factors may not be apparent.
We cannot track or predict the path of an individual electron but we can predict in aggregate how electrons will flow within specific circumstances.

Unlike domestic production, foreign production of imports contributes nothing to the importing nation?s GDP. Import products are functionally no different than similar domestic products. Annual trade deficits contribute nothing and they?re generally detrimental to their nation?s GDPs. Annual trade surpluses ALWAYS contribute to their nations? GDPs.

I?m a proponent of an Import Certificate proposal that prevents a trade deficit of goods and acts as an effective export subsidy. T he proposal promotes an increased aggregate sum of imports plus exports.


USA?s global trade environment would be transformed by this modification of our trade laws but the government is granted no policy discretion.


The adjusted assessments of goods? values are technical rather than policy determinations. Within this trade policy, individual entrepreneurs determine which goods are traded where and at what price and the nation?s imports can never exceed our exports of goods.

Respectfully, Supposn

myp said:

So I got you from "always" to "generally" and generally is arguable so I guess I got my point through (even though I don't think trade deficits are generally detrimental too, but at least you aren't saying always).
And now for this one lol. Again, always is not true. Take the example of history's extremely protectionist regimes and you quickly see that a trade surplus without allowing imports is not beneficial and not always a contributor to GDP. In fact, it often leads to the worst poverty, income inequality, and production (including GDP numbers). India and China know the dangers of such protectionism all too well from their practices circa 1950 to the early 1990s.

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MVP, I?m a proponent of a particular version of a transferable Import Certificates, (ICs) proposal. With regard to this proposal I will not discuss provisions of other policies that differ and/or have no relation to what I advocate.

We know that that unlike domestic products, the production of imports contribute nothing to our GDP but rather their purchase denied ourselves of their contributions to their producing nations? GDPs.
Its contended to the extent that import prices do not reflect their full contribution to their producing nation?s GDPs, import purchases further deny contributions to our GDP. Furthermore to the extent that imports and domestic products upon entering USA?s domestic market do not functionally differ, their contributions to our GDP after entering do not differ.

The proposal will significantly decrease our trade deficit of goods and because it acts as an export subsidy it will increase USA?s aggregate sum of imports plus exports. This proposal is driven by the global market value of the Import Certificates. Within that market it is the entrepreneurs rather than the government that determines what goods will pass in or out of the USA. The proposal will significantly decrease our trade deficit and because it acts as an export subsidy it will increase USA?s aggregate sum of imports plus exports.

Wrigley spent a fortune on advertising to maintain or increase his dominance of the chewing gum market and to increase that market. The quote ?I know that at least half of my advertising budget is wasted, but I don?t know which half? is attributed to Wrigley. Similar to Wrigley, we do not know what items that create our trade deficit?s detriment to our GDP were the most detrimental to our GDP. Unlike Wrigley, we can leave that sorting out to individual entrepreneurs.

Respectfully, Supposn

Allways & generally

I got my point through (even though I don't think trade deficits are generally detrimental too, but at least you aren't saying always).................................... [/QUOTE]

MVP, the difference between ALWAYS and GENERALLY is the difference between what?s a defined fact and what?s an opinion based upon logic.
I consider that production of imports contributing nothing to our GDP is a defined fact.
I expect you to accept as logical that (only) to the extent imports and domestic products upon entering USA?s domestic market do not functionally differ, their contributions to our GDP after entering do not differ.
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Our differences lie within what I consider logical contentions that you apparently do not accept:

The reductions of GDP due to imports are money that cannot again be spent by us and thus is a reduction of possible funds for future contributions to USA?s GDPs;

The contention that there can be supporting or contributing goods and services that are not reflected within the price of a product.

To the extent the product?s globally traded, ALL of a nation?s production contributes to the nation?s GDP but to the extent the product?s globally traded, any supporting goods and services not entirely reflected within the prices of the nation?s globally traded products will not be attributable to global trade.
Thus if the globally traded product?s an export, exports? contribution to the nations? GDPs are understated.

Similarly if that globally traded product?s an import, (and you accept the contention that imports do not simply contribute nothing but also deny importing nations of their imports? contributions to the producing nations? GDPs), then the imports detriment to the importing nation?s GDP is understated.

Respectfully, Supposn

myp said:

.....................As for domestic and imported production- once it is made it is made, but even then perfect substitutes are not likely. But more importantly, the production of said goods does matter as that is still reflected in the cost and that can vary greatly between imported or domestic goods.......................

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MVP, I didn?t write of ?perfect substitute? and I didn?t write of produced products? values, but rather ? (only) to the extent imports and domestic products upon entering USA?s domestic market do not functionally differ, their contributions to our GDP after entering do not differ?. Do you agree with this?

If you?re unable to stipulate agreement to this at the very least, is there anything within this trade proposal that we agree upon?

You do not agree that annual trade deficits NEVER contribute to their nations? GDP. Do you believe that they do contribute to their nations? GDPs? If these are our positions there?s no point to discuss a proposed remedy if you doubt the existence of the problem.

I would then ask if you?re satisfied with our current trade policies and if not, what remedies do you advocate? Why haven?t you opened a discussion of that topic?

Respectfully, Supposn

Sadar8585 said:

I don`t agree with that, GPD has failed as a indicator because it ignores social diversity

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Sadar8585, the down side of GDP?s objectivity is it reports without judgment. Dollars spent for a lap dance or basic research or development of an energy saving device, all equally contribute to the GDP.
A subjective indicator would be an inferior indicator. A more subjective economic indicator applied to differing societies may be even less useful.

Respectfully, Supposn

mas24546 said:

Hey Supposn I got your point but what is subjective indicator?

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A subjective economic indicator as opposed to an objective economic indicator.

Respectfully, Supposn

Sadar8585 said:

I don`t agree with that, GDP has failed as a indicator because it ignores social diversity.

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Sadar8585, within the Wikipedia’s discussion of the topic “GDP”, there’s the sub-topic entitled “Other Metrics” that describe proposed alternative statistical descriptions of a nation’s economy and/or standard of living.

These alternatives the gross domestic product are much more subjective rather than objective and they're not generally accepted or referred to within the communities of economists.

Google “ wikipedia, gdp “.
Respectfully, Supposn

Off topic.

RoccoR, I agree with your message.

Why is it posted to a topic regarding a method to reduce USA?s trade deficit in a manner to increase our gross domestic product and median wage?

I?m a proponent of a transferable Import Certificate trade policy.

If you believe it doesn?t belong within an existing discussion topic, why don?t you open a new topic?

Respectfully, Supposn