| (did you read the preceding debate before making this post?)
yes, a devalued dollar makes our exports cheaper for foreigners to buy. the problem is that for americans, a devalued dollar makes foreign imports more expensive. that is inflation. and, consumption fuels 2/3 of our economy. what your post clearly overlooked is the incredible pain, and drop in standard of living, that america would experience while becoming an export-oriented economy, rather than a consumption-oriented economy.
there has been some decrease in the trade deficit, but the dollar has continued to fall - because of the fiscal irresponsibility of congress and bush. when you have a republican majority, many of whom have sworn on the bible that they will never raise taxes, our fiscal future looks like it will remain irresponsible.
as far as your last paragraph is concerned, the issue as i see it is that we've abused the dollar's position as the #1 reserve currency. we've borrowed (i.e. engaged in deficit spending) like a gluttonous fool, and we've readily imposed our agenda on the entire world. we've staked much of our economic security on the assumption that foreign countries will always choose to fill their reserves with dollars. up until recently, they didn't have a solid alternative to choose from, but now they do. there are reasons, both economic and geopolitical for why these countries are shifting some of their reserves into euros. |