Free Trade Solution to Balancing Trade: Export-Import Coupons ClIFFord W. lazar Free Trade Solution to Balancing Trade: Export-Import Coupons ClIFFord W. lazar an ovi Magazine Books Publication 2022 Ovi Project Publication - All material is copyright of the Ovi magazine & the writer C Ovi books are available in Ovi magazine pages and they are for free. If somebody tries to sell you an Ovi book please contact us immediately. For details, contact: submissions@ovimagazine.com No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the writer or the above publisher of this book. American Trade and the Free World is in Trouble America’s trade is unbalanced, and the results are lost middle class manufacturing jobs, lower value of the US dollar, and transfer of ownership of our real estate, companies, political power and control over our own destinies to Chinese, Russian, and Arab peoples and companies. This transfer can be stopped. Unbalanced trade weakens America. America has given away its manufacturing power to cheap labor countries. The American middle class has shrunk. The median income is down. The top 1% has tripled its share of income while reducing its tax rates. Tax revenues have dropped for cities, counties and states are way down, resulting in closing libraries, reducing education, cutting police and city services. The hard-pressed Source: US Department of Commerce http://www.hubbertpeak.com/us/images/ US_Trade_Balances_1960_2004.gif middle and lower classes can’t justify foreign aid. Populists are demanding protectionism. The financial elites want more and more outsourcing which leads to downclassing the middle class to the lower class. And what does that mean? An America that buys fewer, cheaper cars, less furniture, fewer, shorter vacations, less travel, less savings, less investment, and lower tax revenues. A weak America which can’t afford foreign aid and military alliances is an America that democratic governments can’t rely upon. We have Trouble in River City, trouble with a capital T. On the other hand balanced trade, if it existed, would spur eco- nomic efficiency, full employment and would be good for all countries. How Does a Balanced Trade Solution Happen? Is it possible to have a solution for balanced trade? If the past is a guide, it is unlikely America or the elites will provide a solu- tion to balanced trade. The elites have been bought off by the Chinese, Japanese and OPEC. The elites will vigorously oppose balanced trade because their incomes depend on imports, con- sulting contracts and stock and bond trading bonuses. Even though balanced trade is critical for America and the world the White House has not sponsored nor has the US Con- gress never has offered legislation to balance trade since the Alexander Hamilton’s time, the late 1700’s. An exception was the Smoot-Halley Tariff of the 1930’s, which was an effect of the Great Depression, not its cause. The problem is its common wisdom that the Smoot-Halley Tariff caused the Great Depres- sion. It’s taught is high school history books. The second problem is a tariff tit for tat. We raise our tariff, causes you to raise your tariff. When some propose that America become as projectionist as China, Japan or Brazil, respected economists fear such protec- tionism by America could lead to tariff escalation and a world- wide depression. We oppose protectionism. We believe in balanced free trade, free for both sides. An equally poor alternative is subsidizing exports with tax breaks or loans. It’s a violation of WTO. The Solution: A self-Regulating System, Export Coupons Thus, we propose a solution that can be adopted by every coun- try or just the USA. Imports should balance exports. Imports, if excessive, should subsidize exports to prevent them from getting out of line. If exports exceed imports the subsidy automatically is reduced because the export coupons would be in surplus and the price would drop on the Coupon Exchange, Coupex. It’s like a governor on a steam engine. When the engine runs fast, the balls swing out, pulling down the lever, which closes the air inlet valve, slowing the engine. When the engine runs slow, the balls fall down, raising the lever, this opens the air inlet valve. A self-regulating system. The world needs a self-regulating system to balance trade among all the nations. If America adopted it alone, it would work to every nation’s benefit. If every nation adopted it would work the same way. A Self-Regulating System How “Imports Subsidize Exports” Works America should award exporters 1.2 coupons for each dollar they export and require that every dollar of imports be matched with one coupon. Thus, when a New Hampshire farmer sells $10,000 worth of maple syrup to France, the farmer will receive 12,000 export coupons that he can later sell or trade. When Toyota wants to ship a $30,000 car to the United States it must deliver 30,000 coupons to US Customs. It will have to buy the coupons from the New Hampshire farmer or a Michi- gan auto parts company or a California rice grower or a Wash- ington State airplane manufacturer. There would never be any physi- cal coupons. Rather, each export- er and each importer would have an account on Coupex. When the US Customs or the US Com- merce Department certifies that a bona fide export occurred the ex- porter’s Coupex account is credit- ed 1.2 coupons for each dollar ex- ported. The coupon credits come from the US Customs account. When an importer, like Wal- Mart or Exxon brings imports to the US, the importer has to pay the US Customs one coupon for each dollar of import. The coupons are transferred from the importer’s Coupex account to the US Customs account. The importer gets the coupons by buying them on the Coupex from selling exporters. The more export coupons, the lower the Coupex price. The fewer the export coupons, the higher the price. Traders would bid for export coupons on Coupex http://www.nypost.com/rw/ny- post/2010/04/11/news/photos_stories/ cropped/035_stock--300x230.jpg Getting a Smooth Start Because there will be a 20% sur- plus of the coupons there will not be a coupon shortage that will promote price gouging. At the same time the exporters will re- ceive additional revenue and the imports will cost slightly more until the US dollar regains its strength. If, however, trade becomes un- balanced and imports greatly exceed exports, then the coupons will become more expensive and the higher prices will subsi- dize exports and penalize imports and automatically correct the imbalance. Supply will equal demand when the price is bid to where the importers and exporters both buy and sell what they want at the price. http://www.debunkingeconomics.com/Maths/ Present_for_Sraffa_files/image002.gif Putting Importers to Work for American Jobs Major importers, such as oil companies, consum- er electronics companies, auto importers and Wal- Mart would voluntarily look for opportunities to export American goods. They would utilize their agents overseas to seek opportunities for American exports in- cluding American sub-assemblies, American food stuffs, and use of American shipping services. Chinese and Japanese Would Build Markets for American Goods Japanese auto makers would use their political power to open Japanese consumer and government markets to American goods in order to secure export coupons. Chinese manufac- turers would even look in other countries to help American companies export Good for labor http://www.egmcartech.com/wp-content/up- loads/2009/03/uaw_workers_chevrolet_camaro.jpg A Free Market Solution At the same time, because the export coupons are freely trad- ed, any trade item can sub- sidize any other. This would enhance market efficiency and free trade. Imports subsidizing exports is a free enterprise, free trade way, to balance trade. We have to get trade in balance before all American corpora- tions, the tall office buildings in our major cities, and all of the fertile farms on our vast prairie lands are owned by overseas landlords and before America becomes the colony of our pro- tectionist trade partners. Our biggest importers would boost our exports http://www.elkriverdirectory.com/WalMart. elkriver.jpg Export coupons will be good for America, and we would welcome other na- tions adopting the same policy. Export coupons are fair. They are simple, and they would solve the balance of trade problem permanent- ly. And if there is a solution to balancing trade its imports subsi- dize exports. There is no other possible solution. If you think you have a superior alternative, what is it? Imports can be balanced with exports http://routingbyrumor.files.wordpress.com/2009/02/ costco-warehouse.jpg an ovi Magazine Books Publication 2022 Ovi Project Publication - All material is copyright of the Ovi magazine & the writer C Ovi books are available in Ovi magazine pages and they are for free. If somebody tries to sell you an Ovi book please contact us immediately. For details, contact: submissions@ovimagazine.com No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the writer or the above publisher of this book. Free Trade Solution to Balancing Trade: Export-Import Coupons Clifford W. Lazar 1st edition: August 2010 2nd edition: March 2022 Ovi magazine Design: Thanos Free Trade Solution to Balancing Trade: Export-Import Coupons ClIFFord W. lazar Clifford W. Lazar has a B.A. and M.A. in Eco- nomics, specializing in development and income distribution. Cliff worked in defense and energy companies. As Co-chairman of Scientists and Engineers for McGovern for President, he wrote McGovern’s peace-time reconversion plan.