Reduce the trade deficit; increase GDP & median wage

Supposn

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This article has a few interesting things to say and a few that are not.

http://money.msn.com/how-to-budget/what-if-you-had-to-buy-american.aspx

But one line that was interesting is this:

"Trade protections, whether through tariffs or quotas, cost the economy roughly $2 for every $1 in additional profit for domestic producers,[]"

Dr. Who, I have less confidence in the determinations of the more right wing American Enterprise Institute and greater confidence in those of the more left wing Economic Policy Institute.

I do believe that the U.S. Congressional Budget Office is non-partisan but they only answer the questions that the U.S. Congress has the courage and integrity to ask. As with many polls, research and think tank organizations, the answers they develop are highly dependent upon the wording and the manner of their questions.

I don’t know how the AEI reached their conclusion that “Trade protections, whether through tariffs or quotas, cost the economy roughly $2 for every $1 in additional profit for domestic producers”.

That may be true and it’s conceivable that their figures could be correct but I’m reluctant to accept any opinion without trying to examine and test the logic that supports it.

I’m a proponent of a market driven policy of transferable Import Certificates, that’s entirely funded by U.S. purchasers of foreign goods, and indirectly but effectively subsidize exports.

I do not know how the AEI reached their conclusions but I doubt if they specifically considered anything similar to the trade proposal I advocate. To the extent that all of the policies the AEI considered differ from the policy I advocate, their opinion is not germane to the specific policy of transferable Import Certificates that I support.

Respectfully, Supposn
 
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Supposn

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Exports and trade surpluses.

Exports ALWAYS contribute and imports are ALWAYS detrimental to their nations’ GDPs.

Global trade imbalances’ affects upon their nations’ GDPs are generally understated.
Exports’ affects upon their nations’ GDPs are generally understated.

Each dollar of exports ALWAYS directly contributes to their nations’ GDPs. Exports contributions to their nations’ GDPs generally exceed their nations’ total exports.

I know that to some extent the prices of many exports do not fully reflect the entire goods and services that contributed to the exports’ productions. Those supporting products cannot generally be identified and attributed to global trade. If any additional production of non-globally traded products are induced or supported by the production of exported products, those additional productions cannot be identified and attributed to global trade. Due to these afore mentioned products that cannot be identified and attributed to global trade, exports’ contributions to their nations’ GDPs are to some extent understated. (Message #16 further explains this with some examples).

[The argument of products’ productions often supporting and/or inducing significantly more productions is not an esoteric concept. This is similar to federal promoting spending for space and aviation programs. The government and their contractors) shouted about the additional knowledge, infrastructure and commercial activity that was a byproduct of these programs. I’ve always doubted the figures they pulled out of their hats but I never doubted their claims of byproducts due to our aviation and space spending supported and/or induced significant additional contributions to our GDP from other less related or unrelated industries].

I must now leave. I’ll discuss Imports when I return.
Respectfully, Supposn
 

Supposn

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Imports and trade deficits.

Imports and trade deficits.

GenSeneca, trade deficits are deducted from a nation’s expenditures for goods and services not because (as you suggested), to prevent their being counted twice.

They're deducted to entirterly prevent them from being counted.

Imports as they enter the nation have contributed nothing to the nations’ GDPs. (After entering the nation they are economically benign; they ADDITIONALLY contribute no more or less than similar products after reaching their domestic producers’ shipping platforms).

Due to choices of purchasing foreign rather than domestic products, the nation’s GDP is less than otherwise. The nation has denied itself of greater than otherwise GDP. Those benefits fully contributed to the GDPs of the import products’ producing nations.

This is true regardless of the benefits to the purchasing entities. Individuals and their societies best interests more often do coincide but there are many practices and agreements that are illegal within our nation because (although they’re to the advantage of the principle entities), they’ve been deemed contrary to our societies’ best interests).

Similar to the reasons for generally understated trade surplus’s contributions to their nations’ GDP, trade deficits’ are ALWAYS detrimental to their nations’ GDPs and those detriments are generally understated.

Respectfully, Supposn
 

GenSeneca

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Re: Imports and trade deficits.

GenSeneca, trade deficits are deducted from a nation’s expenditures for goods and services not because (as you suggested), to prevent their being counted twice.
That is not what I said and it wasn't "my" suggestion. According to the formula for calculating Gross Domestic Product, imports add to the terms of CGI and therefore must be subtracted to prevent foreign goods from being counted as domestically produced goods.

They're deducted to entirterly prevent them from being counted.
That's correct but that was not what you have been saying. You've been claiming that imports are subtracted because, and I quote:

"USA’s trade deficit denied our nation the production of the products we imported. That’s why trade deficits are negative terms within GDP calculations." - Supposn
So now you're going from being incorrect about the formulation of GDP, to being dishonest about the formulation of GDP, to flat out lying about what you're on record as having said about the formulation of GDP.

Imports as they enter the nation have contributed nothing to the nations’ GDPs.
According to the formula for GDP, that statement is entirely false. Imports add to the terms of CGI in the formula for GDP, which is why imports, M, must be subtracted out of the equations - to keep from being counted as domestic production.

Due to choices of purchasing foreign rather than domestic products, the nation’s GDP is less than otherwise. The nation has denied itself of greater than otherwise GDP.
Just one problem with your theory... It's contradicted by empirical data. Our imports are lowest when our economy is in the crapper and imports are highest when our economy is booming. That's not opinion, that's fact, supported by empirical data.


This is true regardless of the benefits to the purchasing entities. Individuals and their societies best interests more often do coincide but there are many practices and agreements that are illegal within our nation because (although they’re to the advantage of the principle entities), they’ve been deemed contrary to our societies’ best interests).
Since you're just cutting and pasting previous comments, should I cut and paste previous responses to those comments? :rolleyes:

Similar to the reasons for generally understated trade surplus’s contributions to their nations’ GDP, trade deficits’ are ALWAYS detrimental to their nations’ GDPs and those detriments are generally understated.
Propaganda Techniques, Repetition: Propagandists use this technique to drum the message into the target audience's subconscious by repeating keywords or phrases over and over until resistance to the message weakens. The target audience eventually accepts the message often without even realizing it.
 

Supposn

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Trade deficits are ALWAYS detrimental to their nations’ GDPs.

Correspondence between GenSeneca and Supposn:

Originally Posted by Supposn:
GenSeneca, trade deficits are deducted from a nation’s expenditures for goods and services not because (as you suggested), to prevent their being counted twice.

Originally Posted by GenSeneca:
That is not what I said and it wasn't "my" suggestion. According to the formula for calculating Gross Domestic Product, imports add to the terms of CGI and therefore must be subtracted to prevent foreign goods from being counted as domestically produced goods.

Originally Posted by Supposn:
They're deducted to entirely prevent them from being counted.
That's correct but that was not what you have been saying. You've been claiming that imports are subtracted because, and I quote:
"USA’s trade deficit denied our nation the production of the products we imported. That’s why trade deficits are negative terms within GDP calculations." - Supposn

Originally Posted by GenSeneca:
So now you're going from being incorrect about the formulation of GDP, to being dishonest about the formulation of GDP, to flat out lying about what you're on record as having said about the formulation of GDP.
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GenSeneca, trade deficits are deducted from U.S. purchases of products in order to prevent the purchase foreign products’ purchases from being included among U.S. purchases of domestic products.
They’re ALSO deducted because the choice to purchase foreign goods denied the nation of the benefits that would have been derived from purchasing domestic goods.

You do not accept the concept that what’s to the immediate advantage of individual purchasers can be immediately and over the long term detrimental to the nation’s aggregate economy.

You can’t handle the truth.

Respectfully, Supposn
 

Supposn

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Correspondence between GenSeneca and Supposn:

Originally Posted by Supposn:
Similar to the reasons for generally understated trade surplus’s contributions to their nations’ GDP, trade deficits’ are ALWAYS detrimental to their nations’ GDPs and those detriments are generally understated.

GenSeneca’s response:
Propaganda Techniques, Repetition: Propagandists use this technique to drum the message into the target audience's subconscious by repeating keywords or phrases over and over until resistance to the message weakens. The target audience eventually accepts the message often without even realizing it.
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GenSeneca, the word “propagandists” is inconsequential to the message’s validity. In this case the message is true.

Respectfully, Supposn
 

GenSeneca

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Similar to the reasons for generally understated trade surplus’s contributions to their nations’ GDP, trade deficits’ are ALWAYS detrimental to their nations’ GDPs and those detriments are generally understated.

False attribution: an advocate appeals to an irrelevant, unqualified, unidentified, biased or fabricated source in support of an argument.

Proof by assertion: sometimes informally referred to as proof by repeated assertion, is a logical fallacy in which a proposition is repeatedly restated regardless of contradiction.

GenSeneca, the word “propagandists” is inconsequential to the message’s validity. In this case the message is true.

Wishful thinking: a specific type of appeal to emotion where a decision is made according to what might be pleasing to imagine, rather than according to evidence or reason.
 

Supposn

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Trade deficits are ALWAYS detrimental to their nations’ GDPs.

GenSeneca, your statement: “Imports are not produced domestically and therefore should not be counted in Gross Domestic Product.
Imports add a positive value to the terms of G, I, and/or C.
To give an accurate account of Gross Domestic Product, the Import value must be zero’s out.
Imports are therefore represented as a negative integer (- M) to zero out the positive value they add in G, I, and/or C”
is correct as it stands.

Imports entering the nation are no more or less economically beneficial than similar products arriving at one of the nation’s producers’ shipping platform. Their entire economic differences occur prior to those points. Unlike domestically produced products, to the extent that products were foreign produced, their production contributed nothing to importing nations’ GDPs.

The GDP only reports upon what was the nation’s production. Due to spending for the purchase of foreign products, the nation denied itself the net benefits derived from domestic production and the importing nations’ GDPs were less than otherwise. That’s trade deficits’ major detriments to their nations’ GDPs.

To the extent that supporting productions are not entirely reflected within the prices of imported products, imports prices were understated. The nation additionally denied itself of net benefits derived from domestic production and the importing nations’ GDPs were further decreased more than otherwise.

[Although all production contributes to the producing nations’ GDPs, production that is not reflected within the prices of global trade products cannot be identified and attributed to global trade].

To the extent that the production of imports supported or induced other production that is not reflected within the prices of the nations’ imports, the nation denied itself of further additional net benefits derived from domestic production and the importing nations’ GDPs were further decreased more than otherwise.

Trade deficits are ALWAYS detrimental to their nations’ GDPs and those detriments’ are generally understated.

Respectfully, Supposn
 

Supposn

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Trade deficits are ALWAYS detrimental to their nations’ GDPs.

................ Just one problem with your theory... It's contradicted by empirical data. Our imports are lowest when our economy is in the crapper and imports are highest when our economy is booming. That's not opinion, that's fact, supported by empirical data. ...........

GenSeneca, your statistics may be facts.
The conclusions you’ve arrived at due to those statistics are opinions; I believe in this case you’ve reversed cause and effect. For further discussion with regard to this facet of trade deficits and the value of the U.S. dollar, refer to messages #42 and #43.
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Excerpted from message #42:
You argue that annual statistics demonstrate a positive rather than an inverse relationship between trade deficits and their nation’s GDPs. Logically then wouldn't a trade surplus be detrimental to the GDP?

Trade deficits are not the only factor that affects GDP. Nation’s import volumes are affected by their volumes of all (imported and domestic) products sold within their domestic markets. Similarly nations’ export volumes are affected by the volumes of all products sold within their foreign markets. Currency exchange rates are both affected by and affect nations’ trade deficits.


Respectfully, Supposn
 

GenSeneca

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Re: Trade deficits are ALWAYS detrimental to their nations’ GDPs.

Due to spending for the purchase of foreign products, the nation denied itself the net benefits derived from domestic production
Oil. We cannot produce enough of it domestically and are therefore required to import it so the needs of our economy are met. Any time a nation cannot fill domestic demand with domestic production, imports are necessary.

If you believe that a domestic market exists that can be filled with domestic production, you need to explain why there are no companies building factories to meet the demand in order to rake in all that profit that's being sent overseas.

the importing nations’ GDPs were less than otherwise.
Not according to statistics. Again I point out that during booms, imports are up, during recessions, imports are down. Again, that's not an interpretation of the empirical data, that's not an opinion about the statistics, those ARE the statistics, that IS what the empirical data shows.

Your theory is directly contradicted by empirical data and you have never even attempted to account for it.

Trade deficits are ALWAYS detrimental to their nations’ GDPs and those detriments’ are generally understated.

Proof by assertion: sometimes informally referred to as proof by repeated assertion, is a logical fallacy in which a proposition is repeatedly restated regardless of contradiction.
 

Supposn

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Trade deficits are ALWAYS detrimental to their nations’ GDPs.

Oil. We cannot produce enough of it domestically and are therefore required to import it so the needs of our economy are met. Any time a nation cannot fill domestic demand with domestic production, imports are necessary.
If you believe that a domestic market exists that can be filled with domestic production, you need to explain why there are no companies building factories to meet the demand in order to rake in all that profit that's being sent overseas.

GenSeneca, I’m a proponent of an Import Certificate trade proposal that excludes the value of precious or scarce minerals integral to any assessments’ of goods. (It’s would not be applicable to specifically listed precious metals, ores, gems and petroleum.
I suppose you’re aware of this but chose to insert oil into the discussion anyway.

Trade deficits are ALWAYS detrimental to their nations’ GDPs and those detriments’ are generally understated.
Not according to statistics. Again I point out that during booms, imports are up, during recessions, imports are down. Again, that's not an interpretation of the empirical data, that's not an opinion about the statistics, those ARE the statistics, that IS what the empirical data shows.
Your theory is directly contradicted by empirical data and you have never even attempted to account for it.

Your empirical statistics may be facts. Your conclusions based upon those statistics are opinions; I believe in this case you’ve reversed cause and effect. For further discussion with regard to this facet of trade deficits and the value of the U.S. dollar, refer to messages #42 and #43.

Trade deficits are ALWAYS detrimental to their nations’ GDPs and those detriments’ are generally understated.
Proof by assertion: sometimes informally referred to as proof by repeated assertion, is a logical fallacy in which a proposition is repeatedly restated regardless of contradiction.


My repeating the truth or your rejection of my arguments supporting that assertion does not reduce the truth's validity. Trade deficits are ALWAYS detrimental to their nations’ GDPs and those detriments’ are generally understated.

Respectfully, Supposn
 

GenSeneca

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Re: Trade deficits are ALWAYS detrimental to their nations’ GDPs.

GenSeneca, I’m a proponent of an Import Certificate trade proposal that excludes the value of precious or scarce minerals integral to any assessments’ of goods.

Regarding the goods your Import Certificates do cover...

If you believe that a domestic market exists that can be filled with domestic production, you need to explain why there are no companies building factories to meet the demand in order to rake in all that profit that's being sent overseas.

Copy and Paste a response, I dare you.
 

Supposn

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Reduce the trade deficit; increase GDP and median wage.

Regarding the goods your Import Certificates do cover...
If you believe that a domestic market exists that can be filled with domestic production, you need to explain why there are no companies building factories to meet the demand in order to rake in all that profit that's being sent overseas.
Copy and Paste a response, I dare you.

GenSeneca, other nations are unable or unwilling to better compensate their labor. But our wage schedules have been comparatively stagnating which is an improvement over G. W’s administration when wages adjusted for inflation had too often declined.

Other nations’ try to conduct their trade policies in their nations’ best interest which is somewhat similar to USA; we conduct our trade policies to their nations’ best interests.

You’re mistaken; there certainly are companies building factories to meet the U.S. consumers’ effective demands and they do rake in the profits. Unfortunately those factories are generally built beyond USA’s borders.

It prevents USA’s assessed imports of goods from exceeding our exports of good, effectively subsidizes U.S. exports, is advantageous to ANY U.S. entity that competes or aspires to compete with foreign goods within or beyond our borders, entirely funded by U.S. purchasers of foreign goods and is market (rather than government) driven.

I do not dare you but I urge you to reconsider your opposition to this proposal
Respectfully, Supposn
 

Supposn

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GenSeneca, there are significant difficulties with using empirical statistics to extrapolate the effect of a specific type of factor upon a nations’ economies.
A U.N. web site, (www.un.org) states the UN was begun with 51 members and now has 192 member nations. If we further separate them by broad categories of economies, (i.e. 1st, 2nd and 3d world nations), there are not a great number of 1st world major industrial nations.

There’s a great deal of physics involved within the biological sciences and to that extent biological studies and the conclusions reached by those studies are more objective. To the extents more complex biological subjects and the interrelated factors within them that are more complex, the objectivity and validity of statistical biological studies become more questionable. It’s expensive and difficult for medical researchers to gather reasonably valid data concerning the effects of a single factor upon the human condition. To the extent that researchers cannot control the variables of peoples’ environments and existing conditions, they are more dependent upon statistical studies of large groups and possibly only the hope that their subjects statistically emulate the “real world”.

Statistical social studies, (I object to the term “social sciences”) confront difficulties to statistical medical studies.

[A U.N. web site, (www.un.org) states the UN was begun with 51 members and now has 192 member nations. If we further separate them by broad categories of economies, (i.e. 1st, 2nd and 3d world nations), there are not a great number of 1st world major industrial nations].

A national economy is similar to a complex organism within an equally complex environment. Although the statistics are from the “real world”, the numbers of subjects studied are small and there are extensive quantities and proportional differences of the factors that affect nations’ economies.

Furthermore we are discussing nations’ trade deficits’ affect upon their GDPs which are affected by the nation’s domestic and export markets which in turn affect their trade deficits. There is every reason to question which are the causes or the effects with regard to your opinions.

Regarding the relationships between trade deficits and GDPs, I have less confidence in your empirical statistics and more confidence in logical analysis. Refer to messages #42 & #43).

Respectfully, Supposn
 
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GenSeneca

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Re: Reduce the trade deficit; increase GDP and median wage.

GenSeneca, other nations are unable or unwilling to better compensate their labor.
Don't stop there... Tell us how that prevents US companies from expanding domestic production to meet domestic demand.

But our wage schedules have been comparatively stagnating which is an improvement over G. W’s administration when wages adjusted for inflation had too often declined.
Are you now claiming that the POTUS sets wages?

Other nations’ try to conduct their trade policies in their nations’ best interest which is somewhat similar to USA; we conduct our trade policies to their nations’ best interests.
It must be nice to just spout rhetorical nonsense such as that. It's quite an appeal to emotion claiming that the US sets its trade policy to benefit other nations at our nations expense... It's not even close to being true... But it does have an emotional appeal for people who want to believe such nonsense.

You’re mistaken; there certainly are companies building factories to meet the U.S. consumers’ effective demands and they do rake in the profits. Unfortunately those factories are generally built beyond USA’s borders.
I specifically asked why domestic production was not being increased to meet domestic demand. You have not answered the question.
It prevents USA’s assessed imports of goods from exceeding our exports of good, effectively subsidizes U.S. exports, is advantageous to ANY U.S. entity that competes or aspires to compete with foreign goods within or beyond our borders, entirely funded by U.S. purchasers of foreign goods and is market (rather than government) driven.
I know full well how your scam...er, I mean "plan" is supposed to function.

I do not dare you but I urge you to reconsider your opposition to this proposal
If I were to tell you that cutting off your nose to spite your face were in your best interest, would you ever consider doing it?
 
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