Cutting the rates seems to be making the problem even worse. What's your suggestion?
2007-11-05 23:39:26 · 6 answers · asked by Krazinski 1 in Social Science ➔ Economics
Why do anything? The fall in the value of the dollar is not a problem, it's only a manifestation of problems elsewhere, most notably, in the area of budget deficit...
2007-11-06 03:49:20 · answer #1 · answered by NC 7 · 2⤊ 0⤋
The only way to stop the freefall of the dollar is to stop buying imported products. That means oil, toys, clothes, cars, cameras, computers everything. OR, we could figure out a way to export more items than we import. As long as we keep buying more than we sell our dollar is going to get smaller related to the other currencies. Anything you have a surplus of becomes less valuable. This is true with all the countries that hold dollars. Of course we could just keep doing what we are doing now and then nationalize all the foreign holdings. That would make all our "friends" happy...
2007-11-06 07:49:53 · answer #2 · answered by Chris B 2 · 1⤊ 0⤋
How to shore up the dollar and get the economy back on track.
1) Stop pissing money away in Iraq / Afghanistan / War on Terror. One reason for the $ collapse is that the govt is just printing up paper to cover spending on a war that we are not actually paying for. If we must; then capture the oil fields and kill anyone that comes near them.. but statecraft is a stupid and expensive propostion.
2) Eliminate "feel good" spending designed to help hopelessly ignorant people think they are safer; do you really think $12bn for the TSA is accomplishing anything besides assembling the biggest lighter collection the world has ever known?
3) Stablize the US political persona. International investors hate poltical instability and unpredictability. As a result, foreign direct investment in the US is falling apart... the outside world looks at our leadership as just a few rungs up from banana republic croney capitalism
4) Cut off the entitlement spending on foreign entities. Not to single them out.. because there are MANY but Isreal happens to be the most egregious example. The Isreali's have a nuke and a big army... So why are we giving them $5Bn to defend themselves?
5) Lower taxes in investment, raise taxes on consumption. Investment = good. However consumption is economically wasteful fron a balance of trade standpoint. And heck.. the US treasury actually collecting tax dollars would do a LOT to help the dollar. My favorite.. a per gallon consumption tax on oil for the residential (non-essential) sectors. If you insist on driving a Humvee you better darn well be able to pay for the heretofore unmeasured inconvenience, enviormental and economic harm you are doing to your neighbors. Industrial and commercial sectors would not pay this tax since they ostensibly are profit seeking entities and have less motivation for broadbased (non-C level) frivolus consumption.
2007-11-06 10:36:53 · answer #3 · answered by nol b 3 · 0⤊ 0⤋
Introduce the Amero
2007-11-06 07:45:11 · answer #4 · answered by Anonymous · 0⤊ 1⤋
Raise the rates!
2007-11-06 08:36:04 · answer #5 · answered by arrow 4 · 1⤊ 1⤋
dig up the United stated oil
2007-11-06 07:49:24 · answer #6 · answered by Immortal 2 · 0⤊ 1⤋