WSJ op/ed: The Fed vs. the Dollar
Here's a great article by Bill Wilby in the Wall Street Journal discussing the tremendous damage being done to our economy and our nation by the Fed's abandoning any pretense of caring about the strength of the dollar:
The Dollar and the Market Mess
By Bill Wilby, WSJ, 1/23/08
http://online.wsj.com/article/SB120105077515308369.html
| Print article | This entry was posted by Rossputin on 01/26/08 at 01:20:47 am . Follow any responses to this post through RSS 2.0. |
Yours truly
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01/27/08 @ 04:43:02 pm
Ross - as a foreigner, I like the fact that the US dollar will continue to plummet in value but I have to question the damage done to:
-international trade
-the reputation of the US
-the precedent being set that it's Ok to act so irresponsibly (the US also exports policy)
How will our children subsidize the massive deficits under a weakened currency?
Do any of the current presidential candidates represent the valid choices which I see as:
- simultaneously raise taxes and interest rates?
- grandfathering of medicare or social security
I don't see alternatives given current policy goals.
01/27/08 @ 04:58:12 pm
Scott,
A weakened currency is a politically easy way to finance deficits. It basically inflates our way out of the problem, but without it being so obvious that citizens' net worth is being wrecked.
I totally disagree with you that raising taxes are a good option. Every bit of economic history says that's a bad idea.
And the president and Congress have no control over interest rates!
People should have the choice to participate in medicare and social security or opt out. If they opt out, the taxes they pay to support the programs should diminish, although clearly we still have a responsibility to older people who have paid in for so many years. The implied promises to them must be honored.
Best,
Ross