Saturday, March 01, 2008

Bush Economics

The U.S. dollar has fallen 30% against the Euro during the last five years. It has fallen hard against most currencies. Everything Americans purchase from overseas is going up in price, not because of normal supply and demand but because our currency is not worth what it once was. And as any economist will tell you, the value of a currency fluctuates based on the relative strength of a country's economy, the relative risk that it will be able to repay its debts, and the amount of inflation that the issuing government is willing to allow.

Our president talks about "keeping America strong", but his policies have resulted in weakening our country - weakening it a lot. His tax cuts, war fighting, and budget-busting spending have combined to make us appear a lot weaker to other countries. The declining value of our currency is an excellent measure of this weakness because people around the world are actually betting their fortunes on how they perceive us, weaker or stronger. No presidential balony can mitigate this clear worldwide verdict.

If we end up paying $4.00 per gallon of gasoline versus $1.50 when he took office, just remember that about eighty cents of the $2.50 increase is directly related to the currency impacts of President Bush's disastrous economic policies. If our currency was not devalued, today's gas prices of $3.15 per gallon would be about $2.60. This makes a big difference every time we stop to fill up our tank. The bottom line is that he cut taxes on the rich, inflated the dollar, and let the carnage flow through to everyone who drives a car. Thanks, Boss!

1 comment:

Ron Davison said...

I think the most damning stat is the level of investment, which has dropped from about 8% to 1%. I blame it on public debt squeezing out use of savings and investment.