Warren Buffett's excellent 2003 article in Fortune, Squanderville versus Thriftville, is classic.  I had some trouble finding it before, so am enshrining it here, below the fold.  Wouldn't it be great if someone actually acted on the piece 5 years ago?  We'd have some countermeasures in place and be headed in a different economic direction.

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Squanderville versus Thriftville

By Warren Buffet

Oct 2003 FORTUNE

I'm about to deliver a warning regarding the U.S. trade deficit and also suggest a remedy for the problem. But first I need to mention two reasons you might want to be skeptical about what I say. To begin, my forecasting record with respect to macroeconomics is far from inspiring. For example, over the past two decades I was excessively fearful of inflation. More to the point at hand, I started way back in 1987 to publicly worry about our mounting trade deficits -- and, as you know, we've not only survived but also thrived. So on the trade front, score at least one "wolf" for me. Nevertheless, I am crying wolf again and this time backing it with Berkshire Hathaway's money. Through the spring of 2002, I had lived nearly 72 years without purchasing a foreign currency. Since then Berkshire has made significant investments in -- and today holds -- several currencies. I won't give you particulars; in fact, it is largely irrelevant which currencies they are. What does matter is the underlying point: To hold other currencies is to believe that the dollar will decline.

Both as an American and as an investor, I actually hope these commitments prove to be a mistake. Any profits Berkshire might make from currency trading would pale against the losses the company and our shareholders, in other aspects of their lives, would incur from a plunging dollar.

But as head of Berkshire Hathaway, I am in charge of investing its money in ways that make sense. And my reason for finally putting my money where my mouth has been so long is that our trade deficit has greatly worsened, to the point that our country's "net worth," so to speak, is now being transferred abroad at an alarming rate.

A perpetuation of this transfer will lead to major trouble. To understand why, take a wildly fanciful trip with me to two isolated, side-by-side islands of equal size, Squanderville and Thriftville. Land is the only capital asset on these islands, and their communities are primitive, needing only food and producing only food. Working eight hours a day, in fact, each inhabitant can produce enough food to sustain himself or herself. And for a long time that's how things go along. On each island everybody works the prescribed eight hours a day, which means that each society is self-sufficient.

Eventually, though, the industrious citizens of Thriftville decide to do some serious saving and investing, and they start to work 16 hours a day. In this mode they continue to live off the food they produce in eight hours of work but begin exporting an equal amount to their one and only trading outlet, Squanderville.

The citizens of Squanderville are ecstatic about this turn of events, since they can now live their lives free from toil but eat as well as ever. Oh, yes, there's a quid pro quo -- but to the Squanders, it seems harmless: All that the Thrifts want in exchange for their food is Squanderbonds (which are denominated, naturally, in Squanderbucks).

Over time Thriftville accumulates an enormous amount of these bonds, which at their core represent claim checks on the future output of Squanderville. A few pundits in Squanderville smell trouble coming. They foresee that for the Squanders both to eat and to pay off -- or simply service -- the debt they're piling up will eventually require them to work more than eight hours a day. But the residents of Squanderville are in no mood to listen to such doomsaying.

Meanwhile, the citizens of Thriftville begin to get nervous. Just how good, they ask, are the IOUs of a shiftless island? So the Thrifts change strategy: Though they continue to hold some bonds, they sell most of them to Squanderville residents for Squanderbucks and use the proceeds to buy Squanderville land. And eventually the Thrifts own all of Squanderville.

At that point, the Squanders are forced to deal with an ugly equation: They must now not only return to working eight hours a day in order to eat -- they have nothing left to trade -- but must also work additional hours to service their debt and pay Thriftville rent on the land so imprudently sold. In effect, Squanderville has been colonized by purchase rather than conquest.

It can be argued, of course, that the present value of the future production that Squanderville must forever ship to Thriftville only equates to the production Thriftville initially gave up and that therefore both have received a fair deal. But since one generation of Squanders gets the free ride and future generations pay in perpetuity for it, there are -- in economist talk -- some pretty dramatic "intergenerational inequities."

Let's think of it in terms of a family: Imagine that I, Warren Buffett, can get the suppliers of all that I consume in my lifetime to take Buffett family IOUs that are payable, in goods and services and with interest added, by my descendants. This scenario may be viewed as effecting an even trade between the Buffett family unit and its creditors. But the generations of Buffetts following me are not likely to applaud the deal (and, heaven forbid, may even attempt to welsh on it).

Think again about those islands: Sooner or later the Squanderville government, facing ever greater payments to service debt, would decide to embrace highly inflationary policies -- that is, issue more Squanderbucks to dilute the value of each. After all, the government would reason, those irritating Squanderbonds are simply claims on specific numbers of Squanderbucks, not on bucks of specific value. In short, making Squanderbucks less valuable would ease the island's fiscal pain.

That prospect is why I, were I a resident of Thriftville, would opt for direct ownership of Squanderville land rather than bonds of the island's government. Most governments find it much harder morally to seize foreign-owned property than they do to dilute the purchasing power of claim checks foreigners hold. Theft by stealth is preferred to theft by force.

So what does all this island hopping have to do with the U.S.? Simply put, after World War II and up until the early 1970s we operated in the industrious Thriftville style, regularly selling more abroad than we purchased. We concurrently invested our surplus abroad, with the result that our net investment -- that is, our holdings of foreign assets less foreign holdings of U.S. assets -- increased (under methodology, since revised, that the government was then using) from $37 billion in 1950 to $68 billion in 1970. In those days, to sum up, our country's "net worth," viewed in totality, consisted of all the wealth within our borders plus a modest portion of the wealth in the rest of the world.

Additionally, because the U.S. was in a net ownership position with respect to the rest of the world, we realized net investment income that, piled on top of our trade surplus, became a second source of investable funds. Our fiscal situation was thus similar to that of an individual who was both saving some of his salary and reinvesting the dividends from his existing nest egg.

In the late 1970s the trade situation reversed, producing deficits that initially ran about 1 percent of GDP. That was hardly serious, particularly because net investment income remained positive. Indeed, with the power of compound interest working for us, our net ownership balance hit its high in 1980 at $360 billion.

Since then, however, it's been all downhill, with the pace of decline rapidly accelerating in the past five years. Our annual trade deficit now exceeds 4 percent of GDP. Equally ominous, the rest of the world owns a staggering $2.5 trillion more of the U.S. than we own of other countries. Some of this $2.5 trillion is invested in claim checks -- U.S. bonds, both governmental and private -- and some in such assets as property and equity securities.

In effect, our country has been behaving like an extraordinarily rich family that possesses an immense farm. In order to consume 4 percent more than we produce -- that's the trade deficit -- we have, day by day, been both selling pieces of the farm and increasing the mortgage on what we still own.

To put the $2.5 trillion of net foreign ownership in perspective, contrast it with the $12 trillion value of publicly owned U.S. stocks or the equal amount of U.S. residential real estate or what I would estimate as a grand total of $50 trillion in national wealth. Those comparisons show that what's already been transferred abroad is meaningful -- in the area, for example, of 5 percent of our national wealth.

More important, however, is that foreign ownership of our assets will grow at about $500 billion per year at the present trade-deficit level, which means that the deficit will be adding about one percentage point annually to foreigners' net ownership of our national wealth. As that ownership grows, so will the annual net investment income flowing out of this country. That will leave us paying ever-increasing dividends and interest to the world rather than being a net receiver of them, as in the past. We have entered the world of negative compounding -- goodbye pleasure, hello pain.

We were taught in Economics 101 that countries could not for long sustain large, ever-growing trade deficits. At a point, so it was claimed, the spree of the consumption-happy nation would be braked by currency-rate adjustments and by the unwillingness of creditor countries to accept an endless flow of IOUs from the big spenders. And that's the way it has indeed worked for the rest of the world, as we can see by the abrupt shutoffs of credit that many profligate nations have suffered in recent decades.

The U.S., however, enjoys special status. In effect, we can behave today as we wish because our past financial behavior was so exemplary -- and because we are so rich. Neither our capacity nor our intention to pay is questioned, and we continue to have a mountain of desirable assets to trade for consumables. In other words, our national credit card allows us to charge truly breathtaking amounts. But that card's credit line is not limitless.

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.

Because our exports total about $80 billion a month, ICs would be issued in huge, equivalent quantities -- that is, 80 billion certificates a month -- and would surely trade in an exceptionally liquid market. Competition would then determine who among those parties wanting to sell to us would buy the certificates and how much they would pay. (I visualize that the certificates would be issued with a short life, possibly of six months, so that speculators would be discouraged from accumulating them.)

For illustrative purposes, let's postulate that each IC would sell for 10 cents -- that is, 10 cents per dollar of exports behind them. Other things being equal, this amount would mean a U.S. producer could realize 10 percent more by selling his goods in the export market than by selling them domestically, with the extra 10 percent coming from his sales of ICs.

In my opinion, many exporters would view this as a reduction in cost, one that would let them cut the prices of their products in international markets. Commodity-type products would particularly encourage this kind of behavior. If aluminum, for example, was selling for 66 cents per pound domestically and ICs were worth 10 percent, domestic aluminum producers could sell for about 60 cents per pound (plus transportation costs) in foreign markets and still earn normal margins. In this scenario, the output of the U.S. would become significantly more competitive and exports would expand. Along the way, the number of jobs would grow.

Foreigners selling to us, of course, would face tougher economics. But that's a problem they're up against no matter what trade "solution" is adopted -- and make no mistake, a solution must come. (As Herb Stein said, "If something cannot go on forever, it will stop.") In one way the IC approach would give countries selling to us great flexibility, since the plan does not penalize any specific industry or product. In the end, the free market would determine what would be sold in the U.S. and who would sell it. The ICs would determine only the aggregate dollar volume of what was sold.

To see what would happen to imports, let's look at a car now entering the U.S. at a cost to the importer of $20,000. Under the new plan and the assumption that ICs sell for 10 percent, the importer's cost would rise to $22,000. If demand for the car was exceptionally strong, the importer might manage to pass all of this on to the American consumer. In the usual case, however, competitive forces would take hold, requiring the foreign manufacturer to absorb some, if not all, of the $2,000 IC cost.

There is no free lunch in the IC plan: It would have certain serious negative consequences for U.S. citizens. Prices of most imported products would increase, and so would the prices of certain competitive products manufactured domestically. The cost of the ICs, either in whole or in part, would therefore typically act as a tax on consumers.

That is a serious drawback. But there would be drawbacks also to the dollar continuing to lose value or to our increasing tariffs on specific products or instituting quotas on them -- courses of action that in my opinion offer a smaller chance of success. Above all, the pain of higher prices on goods imported today dims beside the pain we will eventually suffer if we drift along and trade away ever larger portions of our country's net worth.

I believe that ICs would produce, rather promptly, a U.S. trade equilibrium well above present export levels but below present import levels. The certificates would moderately aid all our industries in world competition, even as the free market determined which of them ultimately met the test of "comparative advantage."

This plan would not be copied by nations that are net exporters, because their ICs would be valueless. Would major exporting countries retaliate in other ways? Would this start another Smoot-Hawley tariff war? Hardly. At the time of Smoot-Hawley we ran an unreasonable trade surplus that we wished to maintain. We now run a damaging deficit that the whole world knows we must correct.

For decades the world has struggled with a shifting maze of punitive tariffs, export subsidies, quotas, dollar-locked currencies, and the like. Many of these import-inhibiting and export-encouraging devices have long been employed by major exporting countries trying to amass ever larger surpluses -- yet significant trade wars have not erupted. Surely one will not be precipitated by a proposal that simply aims at balancing the books of the world's largest trade debtor. Major exporting countries have behaved quite rationally in the past and they will continue to do so -- though, as always, it may be in their interest to attempt to convince us that they will behave otherwise.

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. Presented with the power to make this happen, important exporting countries might quickly eliminate the mechanisms they now use to inhibit exports from us.

Were we to install an IC plan, we might opt for some transition years in which we deliberately ran a relatively small deficit, a step that would enable the world to adjust as we gradually got where we need to be. Carrying this plan out, our government could either auction "bonus" ICs every month or simply give them, say, to less-developed countries needing to increase their exports. The latter course would deliver a form of foreign aid likely to be particularly effective and appreciated.

I will close by reminding you again that I cried wolf once before. In general, the batting average of doomsayers in the U.S. is terrible. Our country has consistently made fools of those who were skeptical about either our economic potential or our resiliency. Many pessimistic seers simply underestimated the dynamism that has allowed us to overcome problems that once seemed ominous. We still have a truly remarkable country and economy.

But I believe that in the trade deficit we also have a problem that is going to test all of our abilities to find a solution. A gently declining dollar will not provide the answer. True, it would reduce our trade deficit to a degree, but not by enough to halt the outflow of our country's net worth and the resulting growth in our investment-income deficit.

Perhaps there are other solutions that make more sense than mine. However, wishful thinking -- and its usual companion, thumb sucking -- is not among them. From what I now see, action to halt the rapid outflow of our national wealth is called for, and ICs seem the least painful and most certain way to get the job done. Just keep remembering that this is not a small problem: For example, at the rate at which the rest of the world is now making net investments in the U.S., it could annually buy and sock away nearly 4 percent of our publicly traded stocks.

In evaluating business options at Berkshire, my partner, Charles Munger, suggests that we pay close attention to his jocular wish: "All I want to know is where I'm going to die, so I'll never go there." Framers of our trade policy should heed this caution -- and steer clear of Squanderville.

FORTUNE editor at large Carol Loomis, who is a Berkshire Hathaway shareholder, worked with Warren Buffett on this article.

Comments (15)

World Financial Report : Laveranues Pedigree : http://worldfinancial.blogspot.com WOW. Amazing article. If only, if only..... Thanks for the post! March 28, 2008 Interesting but nothing really new : Sam If I understand this, our ICs could be paid for by the importer or the exporting country; essentially it -is- a tax on imports, ergo a tariff, just not a specific one. Either way it would increase the price of imports. The only novelty I can see is that, unlike existing tariffs, it isn't specific to any country or type of trade good, and the cost of the ICs themselves floats. What I don't get is Buffett's contention that other countries wouldn't adopt the same strategy. "This plan would not be copied by nations that are net exporters, because their ICs would be valueless." How so? If they adopted their own IC plan, either their importers or our exporters would have to pay for them, just as ours would have to be paid for by someone. I don't see other countries, en masse or specifically, accepting our ICs without retaliation. After all, it's not their problem that we have a trade deficit. True, devaluation of the dollar isn't in their interest either, but it's still robbing Peter to pay Paul. Interesting idea, but I don't see how it would work. March 28, 2008 ... : Rational Beaver @Sam The ICs are allocated based on the amount of exports - meaning that if China exports $200 billion and imports $50 billion, they would have 200 billion ICs and only need 50 billion of them. That massive excess would make the ICs essentially worthless since they would be so common. March 28, 2008 Rick Falkvinge Agrees : eric : http://moneyandguns.com The similarities between this piece by Warren Buffet and one recently written by Rick Falkvinge of the Swedish Pirate Party are startling: http://falkvinge.com/2008/03/why-us-is-collapsing.html I sincerely hope we're all wrong. March 28, 2008 Still not getting it : Sam @ Rational Beaver: According to the article, "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." Ergo, if these ICs expired in any fixed time period (Buffett suggests six months), China would be unable to obtain $200 billion worth of ICs from anywhere unless aggregate U.S. exports totalled $200 billion during the period the ICs were valid. Since the ICs are not goods- or country-specific, China could in theory obtain the necessary certificates in an open market, but only if total U.S. exports generated enough ICs, and the countries with surpluses were willing to sell them. That might happen, but given the relative scarcity of ICs (issued only in proportion to US exports) and their limited lifespan (whether six months or any other presumably short period), it's hard to see other countries accepting this without retaliation. Again, I may be too dense to understand this, but it seems Buffett is arguing that other countries would be more willing to "help us out" with our trade deficit than face a declining dollar, which they might like even less. Maybe, maybe not. March 28, 2008 ICs : jason @ Sam "Interesting idea, but I don't see how it would work." Well, don't take this the wrong way, but Mr. Buffett happens to be the richest human on the planet today. So, I'm giving him the benefit of the doubt. Since that piece was written we have seen the present president of the US embark on the most disastrous fiscal course imaginable [remember how he was going to be the fiscally responsible one?] which will end up with the US dollar no longer being the world's reserve currency, which is going to cost the world as a whole and the US in particular, a frightening amount of money. Nobody in the US has seen fit to mitigate the relentless greed of the big bankers who turn out to be staunch socialists after all: everybody gets to pay for their stupendous lack of talent at what they do. If Mr. Buffett proposed a plan like that in my government, it would be law as quickly as I could twist enough arms in congress and the senate to make it happen. The ink would not be dry before it got my signature. I think I understand what Mr. Buffett is getting at, and it makes perfect sense: the world is starting to get rid of its dollars, to the US economy's detriment. With Mr. Buffett's plan, they would have been inclined to accept a deal that was better for them and which would work out better for everybody. But that's just me. If the richest man on the planet presents a thoughtful explanation of how to get out from a situation that is starting to look very ugly indeed, I would be inclined to listen. The other clowns who think they know what they're doing are now holding up their hands in Ben 'The Bear' Bernanke's office for a handout to pay for their scandalous mismanagement. And everybody gets to pay for it. March 28, 2008 Another way to look at it : Nick G Buffet's proposition would amount to a decree that the US will no longer import any more goods than it exports, with the implementation of that decree taking the form of a sort of cap-and-trade system, with the cap set at the total value of exports (via the issuance of ICs), and then determining who gets to import through open trading of ICs. So it's an entirely internal action (reduction of demand for imports), with external consequences that other countries might not be happy about in the short term. But in the long term, it's good for them, and they'll realize that, since the other option is just letting the US continue to lose value. Either way we'll end up no longer being spend-happy global consumers, but we can either do it in a controlled way, or via a somewhat delayed catastrophe. March 28, 2008 Dynamic situations : Jonathan : http://www.thegovernmentwedeserve.com @Sam, I think the piece you're missing is that Buffet is proposing a market mechanism. For instance, you mention a current situation whereby China wants to export $200bn of goods to the US. Buffet's suggestion should have the following effects: 1. Because China has to buy ICs, they no longer want to export $200bn 2. Because they get ICs in return for importing goods, they want to import more than $50bn 3. Although the trade gap has now lessened, China nonetheless still has to buy ICs should they want to say export $180bn with only $80 of US imports. Some other points, many of them straight from the article: # Yes, this is a tariff. That is why Buffet say it is a tariff. He's not trying to fool anyone. # The US has a problem that needs a solution. This is only the least bad option he can think of, not something that is inherently good. # For net exporting nations, the supply of their ICs exceeds the demand for them. This makes them more or less worthless. If you want to export to that nation, simply find someone with ICs that they can't get rid of before they expire, and offer them a nominal fee. They'll take it because something is better than nothing. # The reason a country / individual company would pay for these ICs is very simple - the alternative is not selling in one of the biggest economies on the planet, and making less profit. Such a decision would make no sense. The long term goal is that once the trade balance is balanced, either the ICs can be disposed of, or they represent a minimal cost that make no difference to the various duties that have to be paid anyway. To me, the appeal of this solution is that it is open and transparent - it makes it clear there's a problem to be solved, and that it costs money. And the tariff is decided in the marketplace, not by bureaucrats or politicians who are guaranteed to put the wrong size of tariff on the wrong goods. March 28, 2008 ... : Just thinking I would just suppose that China would turn around and impose a EC (export certificate) that would serve the same counter-effect of your IC March 28, 2008 The view from outside of USA : James I´m not sure, but does the USA need those imports?? I definitely think that the answer of the question is a resounding YES!! And if the rest of the world simple turn around and said: "ok, if you don´t way play are way, we won´t let you play at all" ??? For these one I can´t even imagine the answer, but would hard for me to stop laughing ... And just one other question: Does the USA have a enough good´s to sell for what they need?? I don´t really believe so. March 28, 2008 So long (and thanks for all the fish) : Sam @ jason: With all due respect, saying "Mr. Buffett happens to be the richest human on the planet today. So, I'm giving him the benefit of the doubt" is not much different than saying 'hey, George W. Bush is the son of a U.S. President, and he must have been raised right, so let's put him in charge." In any case, last I heard Mr. Buffett wasn't the richest human in the U.S., much less on the planet. @ Nick G.: "Buffet's proposition would amount to a decree that the US will no longer import any more goods than it exports...." Precisely my understanding. The mechanism, as you put it, by which this is enforced doesn't mean U.S. consumers would like it one bit ('What, I can't go load up on cheap Chinese crap at Wal-mart!? That's un-American!!'), nor are the "external consequences that other countries might not be happy about in the short term" going to be much more popular in the long term. "[T]he other option is just letting the US continue to lose value," or as I mentioned above, they will see their dollar holdings worth less and less as we inflate our currency. I agree with you that "we can either do it in a controlled way, or via a somewhat delayed catastrophe," but either way it will not be without pain for American consumers. @James: Do we need all these imports? Probably not really need, and certainly not all. Nonetheless, U.S. consumers will certainly be unhappy and take a financial hit if our freedom to import is curtailed or discouraged. I'd -love- to see our trade imbalance addressed in a more controlled fashion; the falling dollar causes me great pain every time I buy gas or shop for groceries. If Buffett's idea alleviated that pain, great. I simply don't see that it does, nor do I think anything will. It was a great party for some, but the hangover will affect us all. March 28, 2008 Oh yes he is... : Liam D. Ferguson : http://www.ferga.com In any case, last I heard Mr. Buffett wasn't the richest human in the U.S., much less on the planet. Forbes disagrees. http://www.forbes.com/lists/2008/10/billionaires08_Warren-Buffett_C0R3.html March 30, 2008 ... : Bob If you read a lot of Warren Buffett, you start to realize that his principles are very, very simple. They are extremely easy to understand, and they work absolutely. Read any of his advice on investing and you'll inevitably have an 'aha' moment. So why is he the richest man? (and he IS the richest, see above and http://www.theregister.co.uk/2008/03/06/bill_gates_forbes_rich_list/) It isn't because his daddy was the richest man. It's because his principles, while simple, require a temperament that most people lack. The principle that he lays forth in this essay is no different: export more than you import, and you will have wealth. Import more than you export, and you will be poor. The mechanism he suggests is also simple, and the only reason it is necessary is that it makes this concept tangible to American consumers and producers. But that's neither here nor there, because we aren't adopting ICs any time soon, especially under the current administration. So what can we do? In the next couple of months, most of us will get $600 from our Uncle Sam. Use every penny of it to pay for US services and to purchase US goods. April 01, 2008 THE FIX : tomlin How do you fix the deficit? Ask a whole generation of squanderville and their children who are already addicted to spending to pay back the debt in the next 30 years. I think not. We are talking about a democracy not an authorian government that can turn on a dime. The fix has to take into account human nature. Many thriftvillians already own big chunks of squanderville and its businesses. Why not make these savy thriftvillians a squanderville asset? Offer them permanent residence and citizenship in exchange for investing in America. Not only will capital flow back to America, a big talent poll of entreperneurs will flood into American Businesses. Stability, infra-structure, education, oppertunity and the American culture is a huge draw for foriegners and we can pick who will benefit America most. How about a minimum $1,000,000 investment for 5 years or more employing at least 3 employees. Or may be a $2,000,000 investment in real estate for at least 10 years. We can even catch bigger fishes by entising bigger companies to move here. Why not offer BMW employees and their suppliers U.S. Citizenship if they move their main opperations here. Who wouldn't prefer sunny Souther California over cold and crowded Europe? This solution inflict the least amount of pain on Americans. For those of us already established here, we will see our assests (real estate) appreciate. Allow selected richer and higher educated Chinese and Japanese to migrate here, and let their tax bill pay back the capital that was lost in our deficit. Maximum utilization of American resources! Common people, think outside the box! April 14, 2008 To "The Fix Tomlin" : Christian : http://Many people here dont seem to get the European Economical problem Many people here dont seem to get the European Economical problem here in Europe. While the US population is rising the European population is falling and the average age is rising. This means that the workforce will decrease and salaries will further increase. Why would these people move over to "Sunny California?" The incomes in Europe are generally higher, and why leave their families to move to another country? I love traveling, and have been around the world in back again with both business and pleasure , but I would always consider myself a European and not an American or Asian , even if I have lived many months in other countries. The situation are completely different from other countries in other countries like the Philippines. Ive worked and lived with several Filipinos and there is no greater dream for them than to move to the US and live "The American Dream", but try getting anyone from Europe to move to the US and earn less? I dont see why "you people" spend so much on military means.. The numbers from the Iraq Invasion says 250.000 US , 45.000 UK , 194 Polish , 2000 Australia. Paying all of those 250.000 costs a fortune. Joseph Stiglitz says the war costs 2.2 billion USD a month(!). Reducing Oil consumption is really important. Read here: http://tonto.eia.doe.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbblpd_a.htm Multiply those numbers with 100 usd a barrel, and youll be amazed by the numbers. April 16, 2008

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