Euro Versus U.S. Dollar

* Walter Russell Mead’s article (Opinion, Jan. 3) on the possible effects of the euro is as correct as the average American’s response (“duller than utility deregulation”) is appalling. A major legacy of World War II, not a God-given right, was adoption of the dollar as the international reserve standard. This has permitted us to export our own financial policies, including the huge deficits used to finance our present standard of living, which will no longer be possible if the euro is successful as an alternative.

It will also result in the demise of NATO, which has largely served as a vehicle to maintain American military control over Europe and prevent major rearmament of its countries. The shadow of World War II is fading, and Europe is embarking on a path of independence from U.S. oversight. Whether the results are good, through the expansion of the European economy and mutually beneficial trade relations, or bad, through the creation of an adversely competitive power bloc, is beyond our control. As part of this change, the euro will profoundly affect the fiscal and monetary policies of our government in ways which will reach into everyone’s pocketbooks, from social budgets to taxes and mortgage rates and the price of goods.

Wake up, folks!

CARL G. HOKANSON

Encino

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This is a remarkable story on the euro. One very important concept is omitted. Money units like the U.S. dollar are really a promise to provide some product or service in exchange for the dollar. At one time the dollar bearer could demand gold. No longer. The monetary unit now represents the productive capacity of an issuing country. This before any consideration of supply and demand. The productive capacity and, next, the stability of the country must be considered. The European Union has a very poor political track record.

THOMAS B. ARGE

Palmdale