The current account deficit, which is the broadest measure of our international trade accounts, is running at about negative $500 billion per year. That is the gap that we must fill to balance our books. To the extent that we fail, our dollar is worth less ... In the last two years we have been failing badly and the dollar has plunged against the euro and declined against other currencies.
Do you really think an inflated valuation of the dollar as we had under the Clinton/Rubin team is the way to balance the trade books? If not, and if you are sincere in your concern over the current account balance, then why are you so alarmed by a lower dollar? You say:
A lower currency translates into a lower standard of living, despite all the BS about how it is "good for the economy". It is good for the economy in the same way that a huge cut in everybody's compensation is "good for the economy".
Other than the cost of a vacation in Europe possibly being higher than last year, how has the decline of the dollar lowered our standard of living? And this is an empirical question, GST, so none of your usual "everyone knows it - only a fool thinks otherwise" BS. Give me an empirical answer.
Lastly, answer another question or three for me if you are capable.
First, when we ship dollars overseas to pay for the goods and services we import, what financial obligations remain and why?
Second, once the sellers of those goods and services have those dollars, what options do they have as to what to do with them and which of those options, if any, are bad for us in the long run? Oh, and why are they bad?
Third, if you are correct that "any moment now" foreigners will stop wanting dollars, what is the only way they can stop receiving them and how likely is it that they would do that? |
