Re “Greenspan Issues Warning on Dollar,” Nov. 20: Alan Greenspan expressed concern that foreign investors might not indefinitely support the dollar in light of massive federal government deficits and ongoing massive trade deficits. In fact, the dollar is starting to drop. Will this become a free-fall? If we don’t reverse the misguided supply-side approach of the Reagan era (taken up by President Bush), it may be.
Reagan’s approach of massive military spending and ballooning trade deficits already proved disastrous. The extent of the disaster has only been hidden by borrowing more money and passing the buck to future generations.
This mismanagement has reached crisis proportions after 25 years of nearly continuous government ineptitude on this issue. No rational trade stance is possible while the government ignores trade deficits, as long as trading partners continue to host our military bases. No rational budget stance is possible as long as military spending is totally out of control. No rational solution is possible until our government stops making outrageous tax cuts for the rich and stops giving scandalous billions in pork and corruption to insider corporations like Halliburton. No long-term solution is possible until our government stops transferring the costs and debt to future generations.
Though Bush persistently blames President Clinton and 9/11 for the budget woes, his policies have erased the fiscal accountability component from the Republicans’ traditional agenda. Why would he, if he was a fiscal conservative, advocate permanent tax cuts while spending undetermined billions for the misguided war in Iraq and making promises to spend more?
And, ironically, as Bush and the Republican-controlled Congress display a juvenile’s fiscal irresponsibility, the president is promoting a Social Security policy that would urge the American people to take greater responsibility for financial investment in their retirement.
But with his track record, will we have anything left to invest?
Greenspan’s warning that the federal budget deficit is weakening the U.S. dollar comes rather late. After all, it was Chairman Greenspan who gave Congress his blessing to Bush’s tax breaks for millionaires and favored businesses. Was he unable to see how this would contribute to the deficit and weakened dollar?
The tax cuts are funded with borrowed money, and our children will pay for them, with interest, for years to come.