Posted by: Anonymous Coward
on March 13, 2004 02:13 AM
Whatever you may think of the Bush administration, you are grossly (mis-)underestimating them.
Don't assume it's an accident that the dollar is losing value against foreign currencies. You say yourself in the article that it's one of the ways debtor nations handle debts, and yet your headline makes it sound like you think that Bush, et al are oblivious to this fact.
The Germans have been complaining about the falling dollar to the Bush administration and trying to get them to prop up the dollar - which the US is refusing to do (the germans have a much bigger unemployment problem than we do and the falling dollar is hurting them immensely).
The economy is very soft, but it's still growing, and what's keeping it alive is it's being propped up by lowered taxes, deficit spending and extremely low interest rates.
The deficit spending has the added bonus of devaluing the dollar - you get to pay back the debt with cheaper dollars AND make domestic goods more competitive with foreign goods.
Make no mistake, it's a calculated move. It helps the economy in the short-term, thus it helps Bush in his re-election bid.
Long term? Well... that's another story. These chickens will come home to roost one day, and it's not going to be pretty - but it's either a recession today, or inflation tomorrow - take your pick.
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Posted by: Anonymous Coward on March 13, 2004 02:13 AMDon't assume it's an accident that the dollar is losing value against foreign currencies. You say yourself in the article that it's one of the ways debtor nations handle debts, and yet your headline makes it sound like you think that Bush, et al are oblivious to this fact.
The Germans have been complaining about the falling dollar to the Bush administration and trying to get them to prop up the dollar - which the US is refusing to do (the germans have a much bigger unemployment problem than we do and the falling dollar is hurting them immensely).
The economy is very soft, but it's still growing, and what's keeping it alive is it's being propped up by lowered taxes, deficit spending and extremely low interest rates.
The deficit spending has the added bonus of devaluing the dollar - you get to pay back the debt with cheaper dollars AND make domestic goods more competitive with foreign goods.
Make no mistake, it's a calculated move. It helps the economy in the short-term, thus it helps Bush in his re-election bid.
Long term? Well... that's another story. These chickens will come home to roost one day, and it's not going to be pretty - but it's either a recession today, or inflation tomorrow - take your pick.
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