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Import Certificates -- Good Idea or Bad Idea?

At present, the United States purchases more than it sells (a trade deficit), thus is losing money to other countries.  This has been identified by many as the true reason for the United States' current economic decline.  Contrast countries like China and Germany, which run trade surpluses, and whose economies are still healthily growing.

Warren Buffett, and others, have proposed the idea of import certificates to address the trade deficit -- which Buffett identifies as the single greatest threat to the United States' economy.

Import certificates, essentially, are another currency to be used for international trading.  When an entity exports goods from the United States, it receives import certificates equal in value to the dollar amount of the goods exported.

Import certificates would be required of anyone wanting to import goods into the United States.  Prospective importers would have to purchase import certificates from exporters.  The amount for which import certificates were sold by exports to importers would be determined in a completely free-market fashion, based on whichever criteria U.S. exporters choose, and subject to the economic principles of supply and demand.

Naturally, import certificates would not apply to goods which are considered essential, or which cannot be produced domestically.  Thus, agriculture, petroleum, and certain other industries would be exempt, presumably by government discretion.

Moreover, import certificates are entirely self-funding, and would likely have the following effect on U.S. businesses:

 * A company such as Walmart, who single-handedly accounts for 10% of the U.S.-China trade deficit, would be effectively be penalized by having to acquire a disproportionately large number of import certificates from exporters, thereby forced to either lower profits, or raise costs.
 
 * A company which imports goods, modifies them, and then exports them, would see little-to-no effect.
 
 * A company which engineers and manufactures goods domestically would see increased profits or have the ability to lower prices.

This system is not dissimilar to certain instances of regulated trade seen throughout the world.  It is similar in function to China's regulated trade, which taxes imports and subsidizes exports, except that import certificates are driven by the free market, and China's regulated trade is driven by the government.

A variant of this system was also seen in Germany in the 1920s and 1930s, during which time Germany went from one of the most impoverished countries in the history of the world, to one of the world's largest superpowers in less than 20 years.

Switzerland, considered by many to be the most stable economy in the world, has also used a similar system to protect their economy for decades as well.

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