Our trade deficit implies that the US is sending more than half a trillion dollars abroad every year instead of spending it domestically. This is exporting a lot of jobs we cannot afford. According to economic theory, the free market should resolve the problem on its own. But it hasn’t. Warren Buffett, the famous investor, proposed in a 2003 Fortune article to issue import certificates (IC) to all exporters in the amount equal to the value of their exports. They could sell these IC's to would be importers. Firms would have a strong incentive to bring the trade into balance and foreign governments could not retaliate.The price of our exported goods would decline by the amount the exporters received for the certificates from the importers. This would create 2 million jobs at least.
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