Comments on: Deeds, not Words on the US Dollar

By: Craig

Craig — Tue, 17 Nov 2009 20:32:34 +0000

Medicare is a huge problem; Social Security just isn’t. The “trust fund,” such as it is, will never be paid back out, and that means growth in benefits will have to be cut back. That’s not pleasant, and some heads are certainly going to roll, but it’s hardly the end of the world as we know it. Relatively minor adjustments to any number of factors will keep it solvent and paying out at least today’s level of real benefits as far as the eye can see.

By: DaveinHackensack

DaveinHackensack — Sun, 15 Nov 2009 19:04:01 +0000

One way to save money on Medicare would be to phase in a higher eligibility for it, as was done with Social Security. Let non-indigent older Americans spend a couple more years on private health insurance.

As for encouraging the Chinese and others with large dollar holdings to spend that money on U.S. goods and services, I suspect they’d rather buy U.S. assets. Remember when they tried to buy that American oil company though?

By: RichL

RichL — Sun, 15 Nov 2009 14:08:18 +0000

Perhaps the precondition of having a strong dollar is to first have it become cheaper. If the USD/EUR cross was 1.80 and the Yuan was priced in the market rather than in Beijing, then with truly abundant natural gas reserves, fully developed infrastructure, and competitively priced labor, the US would have a strong economy and dollar. The elements are already there; it’s just a matter of price and policy.

By: Lord

Lord — Sun, 15 Nov 2009 04:21:46 +0000

There is actually a very good definition of “a strong dollar”. A strong dollar is one that supports a negative current account balance. The dollar is very strong and will remain strong under almost any conceivable circumstance.

By: Thomas

Thomas — Sat, 14 Nov 2009 04:55:48 +0000

There’s the problem with democracies. They seek to give the people what they want, not what they need, which does rather tend to limit their life spans. How can any politician in our system sunset Social Security or Medicare?

By: But What do I Know?

But What do I Know? — Fri, 13 Nov 2009 13:32:50 +0000

I like the fairy tale bit, David. In another context they have been called “necessary lies.”

By: Chad

Chad — Fri, 13 Nov 2009 00:49:49 +0000

“Buy today, your dollars will likely buy less tomorrow.”

How would one go about convincing them of this that isn’t already being tried? Personally, it seems to me that they plan on permanantly holding our securities at low rates of interest.

By: Lord

Lord — Thu, 12 Nov 2009 20:17:23 +0000

Such is the ambiguity of qualitative measures that the dollar could drop 15% and still be strong. It is not misleading as much as meaningless.

By: q

Thu, 12 Nov 2009 13:49:17 +0000

every treasury secretary has to publicly say they want a strong dollar whether they really do or not. can you imagine the political uproar if any senior level politician said otherwise? he would be gone in a minute.

> Now, with Japan and China, (and OPEC) both should be encouraged in this way. Buy today, your dollars will likely buy less tomorrow.

i’m surprised to hear you talk about solving the crisis through the mechanism of inflation expectations, but there you are.