No. of Recommendations: 8
Thanks so much for the links nola, I'd forgotten that the original link is on the BRK site!
Watching the video you linked, it seems like Warren hasn't changed his view very much regarding tariffs being a tax on consumers over the years that producers may elect to pay at least partially, as they have in the past. Seems like Warren was proposing a modified tariff-like solution in 2003 using Import Certificates (IC):
The time to halt this trading of assets for consumables is now, and
I have a plan to suggest for getting it done. My remedy may sound
gimmicky, and in truth it is a tariff called by another name. But this
is a tariff that retains most free-market virtues, neither protecting
specific industries nor punishing specific countries nor encouraging
trade wars. This plan would increase our exports and might well lead to
increase overall world trade. And it would balance our books without
there being a significant decline in the value of the dollar, which I
believe is otherwise almost certain to occur
<clipped>
The likely outcome of an IC plan is that the exporting nations –
after some initial posturing-will turn their ingenuity to encouraging
imports from us. Take the position of China, which today sells us about
$140 billion of goods and services annually while purchasing only $25
billion. Were ICs to exist, one course for China would be simply to fill
the gap by buying 115 billion certificates annually. But it could
alternatively reduce its need for ICs by cutting its exports to the U.S.
or by increasing its purchases from us. This last choice would probably
be the most palatable for China, and we should wish it to be so.
If our exports were to increase and the supply of ICs were
therefore to be enlarged, their market price would be driven down.
Indeed, if our exports expanded sufficiently, ICs would be rendered
valueless and the entire plan made moot
I hope Warren does expand upon and possibly update his view of Squanderville and Thriftville to today's economy and circumstances! I wonder if he still feels the same about using his plan today?
The entire article is a very worthwhile reread!
