End of the Dollar, Right Around the Corner?

Previous to our last class I had not heard much in the way of deficit spending and the national debt.  Since that class, I do not know if it because I am listening for it more, or because it is showing up in the media more often, I have seen and heard nothing but news about this topic.  In fact, the very next day (Friday of last week) I went down to D.C., to do some research for a paper for my other class, and saw a massive mural/billboard in the Metro station that mentioned something about how common people had the responsibility to save our country from over spending.

 

There are, as I understand it, two sides to this argument.  There are those who think that the amount of spending that the United States is currently spending is detrimental to the balancing of the budget, will increase our national debt and will lead to further inflation and weakening of the United States dollar.  While I do not subscribe wholly to this theory, there is certainly some truth to it.  The other side of the argument is that in the difficult economic times that we are in right now, it is essential to get the economy stimulated, just to get it going to the right direction.  Once this process has begun, government spending can decrease and strength will return to the American dollar.

 

The website that I visited this week discussed what Treasury Secretary, Timothy Geithner, was saying to the people in Asian countries.  He reassured them that "the Obama administration was committed to a strong dollar and to actions aimed at bolstering its value."  It would be easy to dismiss this comment as another politician telling people want they want to hear.  Asian countries, particularly China, want to know that the United States dollar is strong as they are the ones holding much of our debt.  I would argue that Geithner is not that good of a politician and with the President's first year in office coming to a close, the American people are going to want to see a palpable change in the economic conditions in this country.  The United Sates has a vested interest in seeing the American dollar gain strength as well.  I want to believe that most Americans understand these economic principles. 

 

Yet, in "Ads provided by Google" (on the very same page) were websites with titles like Death to the U.S. Dollar: 3 Secrets to Protect You in the Dollar's Final Days and The U.S. Dollar Collapse: You Could Loose Everything Tomorrow, Get Ready For Dollar Collapse Now.  I do not know whether to congratulate these people for their con, or hide my head in shame of my fellow Americans who make those sites possible.

 

For more on the article that I read visit:

http://www.nytimes.com/2009/11/13/business/economy/13geithner.html?_r=1&ref=business

Comments

[Salvatore DeGennaro]

I agree with you that spending is essential to a healthy economy and, as you say, the right kind of spending is needed. With the downturn in the economy over the last couple years people cut back on spending, which further hurts the economy since less money is flowing. This is a bad trend in the stock market. Since a lot of people's investments have tanked people became to scared to invest and less investing means even worse stock performance.