Because of out-of-control deficits and the fiasco of green energy, it is plausible that within two decades, the U.S. will have to issue foreign currency-denominated debt, writes James Rogan. The strong dollar is a blessing; stop whining.
Put simply, the U.S. dollar has not always been strong. In turn, the U.S. should use this period of dollar strength to pursue policies to prevent another decade of decline and perhaps even a recession on the order of the Great Depression.Fears of a civil war are without foundation. During the period between the 2018 presidential election and President Joe Biden’s inauguration, U.S. institutions proved resilient. Jan. 6 was a national embarrassment, but most politicians, the U.S.
But two issues could be catalysts for a severe economic crisis that would test the mettle of the country's people, institutions, economy, and dollar.. Federal debt held by the public, both domestic and international, has grown to 98% of GDP. Entitlements, Social Security and Medicare, are not subject to annual appropriations bills. Such spending grows automatically as the U.S. population ages.
We should thus give thanks each day for the strong dollar, which encourages non-U.S. investors to buy Treasuries. Imagine if the nation were required to fund its Social Security obligations by incurring foreign-denominated debt. What interest rate would Germany or Japan or even China demand? I shudder to imagine.
More immediately, the Biden administration’s green energy policies put at risk the structural underpinnings of the U.S. economy. The U.S. has an enormous comparative advantage in fossil fuel energy, which is cheap and reliable and sustains the U.S. manufacturing and high-technology sectors, the crown jewels of the economy. Green energy is not cheap — see Europe. Nor is it 24/7 reliable — see recent power shortages in Europe, Texas, and California.
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