What can the US Treasury do to strengthen the dollar?

Question

OK, lets keep it to things the Treasury can do. They don't set interest rates like the Fed.

Answer 1

Nothing. If you wanted to strengthen the U.S. dollar, you'd have to reduce the budget deficit. But the Treasury cannot do it without a budget approved by the Congress and signed by the President.

Answer 2

This is making the rather large assumption that the Fed would like to strengthen the dollar. The government deliberately devalued the dollar after 9/11/2001 and decided to roll with it. It staved off a recession because business has been making killings in foreign sales as evidenced by our deficit reducing the last couple of years despite the financial burden of the war in Iraq.
Granted, the sub-prime meltdown probably has weakened the dollar a bit more than they would have liked (and more than foreign nations would like) but it's not a reason to go into panic mode until we get a final look at the banks balance sheets.
If you are very worried about it, open an account and make it in Euros and invest your money in funds that expose themselves more to emerging markets as they are growing steadily right now.
Of course you run risks there as well. The Euro has some inherent risks involved with it as they have a built in unemployment rate over 10% which is diabolical and weak trade at the moment (largely due to the weak dollar). Added to that, you have some nations, most notably Germany, who are having second thoughts amongst the populace about being involved with the Euro and want to switch back to the old national currency. Also, remember in 95-97 the Deutschmark and Yen doubled and looked like 'the currency of the future' and we saw what happened there. Markets are volatile.
Finally, they are heavily invested in the US market and are still on the verge of feeling the hit from the sub-prime meltdown as well.
Sure the dollar is weak but a weak dollar isn't always 100% a bad thing for US citizens. It just depends on how exposed to the markets you are. If you have no investments and just sock away some money in a savings account now and then, you are probably hurting a lot more than someone who's been a bit smarter with their money.

Answer 3

Increase interest rates and keep doing so until we are near recession. We could also increase taxes and pay off the foreign debt. Both would hurt the economy. OTher things include pulling out of Iraq and not spending the billions of dollars it spends on the war. This however would cause the cost of oil to skyrocket which would also hurt the economy. Cutting social spending would decrease our debt strengthening the dollar as well.

Answer 4

Not a damn thing. The Treasury is only responsible for printing money; it is the Federal Reserve and the open money market that determine the dollar's 'strength'.

Answer 5

Feed it Chris Benoit's steroids.