Woes Begin at Home
in Washington are concerned about the loss of jobs in our nation’s
manufacturing sector, but few seem to understand the role Federal Reserve
currency manipulation plays in that loss. The economic problems currently facing this country are the
direct result of a boom-and-bust cycle caused by inflationary Fed policies.
An open debate on monetary issues therefore is long overdue.
However, instead of debating America’s monetary policy, Congress wants to debate China’s monetary policy. The goal is to pressure China to change the valuation of its currency, to unlink it from the U.S. dollar so that its value fluctuates. The main beneficiary of this would be certain U.S. manufacturers, at least in the short run. But American consumers would be the overwhelming losers in the long run, as the price of countless consumer items would rise. Manufacturing interests have powerful lobbies in Congress, but consumers do not.
exports many products into the United States, which makes her a convenient
scapegoat for our economic problems. Demanding
that China adjust its currency valuation is merely a distraction from addressing
the real economic dilemmas facing our country, however.
Congress should be focused on our own disastrous monetary policies.
As long as the Fed can print money at will and set interest rates, the
value of our dollars will be subject to the whims of politicians and the
perceived economic needs of politically powerful special interests.
should consider the sobering fact that the Chinese hold billions of dollars of
U.S. debt. The dollars the Chinese
acquire by selling us goods and services eventually must be returned to the
United States. Since the Chinese are not buying an equivalent amount of American
goods and services, they use dollars to finance our extravagant spending.
fact, our ability to continue funding the welfare-warfare state without
destroying the American economy depends on foreigners buying our debt. Perhaps
we should think twice before we start bullying and browbeating our foreign
creditors to change their economic or other polices to our liking.
of promoting global economic government, Congress should reform those policies
that reduce our manufacturers’ competitiveness. Recently, a prominent
financial journalist visited with businessmen who are launching new enterprises
in China. When he asked them why they chose to invest in China, they answered:
“It is so much easier to start a business in China than in the United States,
especially in places like Massachusetts and California.”
answer should send a clear message to every lawmaker in America: the taxes and
regulations imposed on American businesses are hurting economic growth and
killing jobs. If we are serious about creating jobs, we should be working on an
aggressive agenda of cutting taxes and repealing needless regulations.
We should be working to adopt a stable, gold-backed dollar whose value is
determined by the market. We
don’t need to bully our foreign competitors, we just need to stop subsidizing
them while releasing the regulatory and tax stranglehold on American businesses.