Oh, boo hoo! There are many reasons for the depreciation of the US dollar but “incompetence”? Hardly.
After WWII, America decided, unilaterally, to shoulder the burden of running the global economy, even when it wasn’t in its best interest to do so. It encouraged and protected international trade. It allowed itself to be the world’s export dumping ground without demanding other nations reciprocally open their markets to US exports. It allowed its factories to be shipped in toto to China and other nations. It allowed its advanced technology to be used by others, mostly gratis, for the ideal of lifting the world’s economic standard of living.
It became the world’s policeman since no one else could do the job.
Unlike every other superpower in history, it DID NOT extract tribute from its weaker neighbors. It did not expropriate the natural resources of other nations. It did not seize the richest and most strategic lands of others for concession.
Instead, we have the astonishing spectacle, never before seen in history, of the victor spending its treasury in rebuilding the vanquished. It also gives billions every year to nations that hate it and consistently vote against it in the UN.
These burdens are unprecedented in human history and is simply too great to bear for any single nation. It has kept the value of the US dollar much higher than where it should be, just to help the economies of other nations. Now that the standards of living between nations are leveling, it becomes more and more onerous for the US to be carrying this burden alone. IOW, the margins are getting tighter.
It is true that the welfare state, liberalism, political correctness, and multiculturalism have been tremendous multi-trillion dollar drains on the economy; but it is shared among all western nations, excluding Far East ones, who don’t have this Caucasian mental illness. Those that don’t subscribe to these lunacies, like Japan and the other Asian Tigers, face rapidly aging populations and below-replacement birth rates, giving identical results. Those in Western Europe, who have BOTH anchors, will never be able to carry their own weight, must less replace the US. In fact, their collapse will occur at least a decade before the US.
All this whining of the declining dollar and skyrocketing deficit obscures the fact, if push comes to shove, the US simply doesn’t need to honor its debts, if the alternative is economic collapse. This leaves debtors like China, holding a trillion dollars of useless electronic IOUs. They are trapped into continually propping up the US dollar since the alternative is revolution from the enraged masses who’ve los their life savings.
Edward:
Excellent retort.