[tromp]

The salient part:

> 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 increased 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.

> We would achieve this balance by issuing what I will call Import Certificates (ICs) to all U.S. exporters in an amount equal to the dollar value of their exports. Each exporter would, in turn, sell the ICs to parties—either exporters abroad or importers here—wanting to get goods into the U.S. To import $1 million of goods, for example, an importer would need ICs that were the byproduct of $1 million of exports. The inevitable result: trade balance.

[CharlieDigital]

If I understand this correctly, it would effectively be the same mechanism as carbon offset credits where carbon emitters can purchase credits from entities working to reduce carbon emissions.

I think that there could be some downsides to this because the US exports a lot of agricultural goods which are already subsidized as it is.

[Sytten]

I am not sure this would haves worked since the return of the US stock market was quite high (due to that constant influx of foreign investment notably) compared to any other asset for people/businesses that wanted to invest their profit.

Also due to the reserve nature of the USD the dollar and international trade mostly done in USD there is a huge demand for dollars keeping it strong compared to other currencies. This fundamentally is at odd with an export driven economy.

[rayiner]

> Also due to the reserve nature of the USD the dollar and international trade mostly done in USD there is a huge demand for dollars keeping it strong compared to other currencies. This fundamentally is at odd with an export driven economy.

What if the Dollar weren't the world's reserve currency, either due to deliberate policy by the U.S., or the inevitable fact that the U.S. economy will shrink as a share of the world's economy as India and China develop?

[raincom]

If the USD ceases being the reserve currency, inflation goes up. Fed's neutral rate of interest 2% = the floor of inflation rate. For the third world countries, the natural interest rate = Fed's interest rate (or American inflation rate) + the local inflation rate. That's why third world countries pay more interest rate s in their own currencies; that's why they want to borrow in USD.

[wat10000]

This is basically introducing a second US currency and mandating that it must be used for international trade.

Having different currencies for internal vs external trade isn’t usually something I associate with prosperous countries.

[shipp02]

I don't know if strict import control is a good idea. Look up license raj in India.

It also added a lot of opportunities for corruption.

[graemep]

Yes, but that was because it was a license based system and a lot less transparent than the IC idea.