why does the bush government want to hold the US dollar down?

Question

a down US dollar is not good for the US people. US exporters prefer a lower dollar but lets face it, they are few (albeit large). The US dollar used to stand for strength and security, now it appears the Euro is doing that. I want the US dollar back up and I hope the democrats can do this. Bring back Bill!

Answer 1

Two general things are at play.

First, which is good, is that a cheaper dollar makes American products more competitive. It is like the tax cuts, which does the same thing that the stores in mall do all the time, government on sale prices. So, American business can now sell more things abroad because the dollars to pay for them cost less, exports on sale.

Second, and one of the best examples, was the devalued currency means that debts are easier to pay off. Just as debtors love inflation (paying creditors off with cheaper money), the US government is paying off those they owe with cheaper money. Since a large amount of our national debt is held by foreigners, then we sort of get to cheat a little on the check.

The first item is entirely positive. The second item, well, Germany had to resort to that after the oppressive settlement at the close of WWI. Hyperinflation set in, you couldn't buy a loaf of bread with a bushel basket of German Marks, but boy were they ever paying down their War Reparations bill! Adolph Hitler wormed his way to power, by the way, because of the disgruntled populace. (A similar thing happened in Argentina with Perone, but, thanks to Andrew Lloyd Webber, at least the world got a really pretty song out of it--"Don't cry for me Argentina....")

So while this is both good news and bad news, before you pine too much for Bill (Clinton), his economic advisors set us up for some other features that also had their good and bad. The tax cuts came in just as the bad was on the verge of being realized.

Answer 2

It would be good for businesses who trade with US if the dollar is down. More jobs would be created & boost economy.