alt Hacker NewsBuffett actually does share a fear of trade deficits, though. His proposed solution, as an alternative to tariffs, were "import certificates"-essentially a marketable credit required to import goods. These would be earned via exports by exporters, be freely priced and traded, and would essentially bind import levels to export levels.
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It's really a non-problem.
Net capital inflows into the U.S. = U.S. trade deficit. The balance of payments is simply: Sales of assets – Purchases of assets = Purchases of goods – Sales of goods
If you balance the trade, it means foreigners must stop investing into the US.
Sounds like it would achieve a similar effect, but would be far more complex to implement and yet would still have the effect of being a tax on imports while not actually generating any revenue for the federal government.
That sounds awful a lot like we had it back in the Yugoslavia days. It wasn't exactly free market, as you might know. Companies that exported stuff had credits attached to them and with that quota they could then import goods. They couldn't trade those credits. You then had absurd situations like a company that sells agricultural stuff and has stores for those was also selling, for example, commodore 64 in their stores since that's what they imported.