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Suncoast Pasco News
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Dollar dilemma
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Published: October 24, 2009
The greenback is as synonymous with the United States as apple pie and Chevrolet.
Across the world for nearly 70 years, the U.S. dollar has been the most stable and circulated currency in the world. But this may be changing before our very eyes. The global political economy is being turned upside down right now, and the leadership in the United States is weak. There is a lack of respect for the Obama administration by the great powers of the world.
The dollar has been struggling more than the Florida State football team in reading class. The Treasury is up to its ears in debt and the world is watching. Last week, discussions began among China, Russia, Japan, and the OPEC states about dropping the dollar as the oil reserve currency. This came after Russia, with the original support of China and the European Union, proposed a new world currency at the G20 conference.
What is the big deal about being a reserve currency? Well, oil is traded on the world market in dollars, which is one of the reasons oil has been so much cheaper in the U.S. in comparison to most of the world. This gives us an incredible advantage on the global market. With the value of the dollar now plunging because of economic policy in Washington, the price of crude oil, while not in short supply, has risen to around $80 a barrel and gasoline is up 15 to 20 cents over the last couple weeks.
This is a direct result of years of overspending by the federal government that has intensified thanks to the Obama administration's orgy of "stimulus" spending. Many economists predict that if the dollar is removed as the de facto world currency, U.S. standard of living will never rebound to its previous heights.
The total tab for the stimulus and ObamaCare is $1.7 trillion. Fiscal responsibility, not drunken spending, is needed if the U.S. wants to preserve the dollar and stave off the scourge of inflation.
David Chauncey is a political science major at the University of Florida.
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