The Falling Dollar and Rising Debts

There is no way to dress it up- the greenback is losing its worth. A Congressional Quarterly article noted the dollars recent performance against major currencies during June 2007:

A 30-year low against the Canadian dollar.
A 26-year low against the British pound.
An all-time low against the Euro.

These economic indicators are not favorable, but the declining dollar is a symptom- not the sickness. The root of the problem is the underlying debt, loans and imports America and its people are forced to depend on to maintain our present day standards of living.

The U.S. continues to go deeper and deeper into the red: a rising national debt approaching $9 trillion, the 2006 trade deficit a record high $765 billion.

At the same time Americans are saving less: in 2005 Americans had the lowest reported savings rate since the great depression at negative 1%. During the same year, consumer debt totaled $2.2 trillion.

These debts are supported by nations like China that buy debt in the form of loans and stabilize (prop up) the U.S. economy. As of December 2006, China loaned almost $350 billion in U.S debt, a figure dwarfed only by Japanese debt loans of almost $645 billion that same year.

A sinking currency value, skyrocketing debt, and a dependence on other nations to support America through loans, are a far cry from the profile of a superpower the U.S. presently enjoys

It is a reality for America that many have not fully come to grips with: the country that was the world’s greatest producer is now the world’s greatest debtor nation. But it does not have to remain this way.

The fight against accumulating debt from all corners of society will not be easy- but it must be undertaken. America must invest to reinvigorate its industrial base and give the nation’s best companies incentives to operate domestically rather than selling out to overseas investors, which jettisons American wealth and opportunity abroad.

Through the creation of better domestic job opportunities and revitalizing industries, America can start to wean itself from its import-driven debt dependence. Let’s hope Congress starts to listen- and companies start migrating into and not away from the land of opportunity