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Reagan Adviser: Weak Dollar Good for U.S. Economy

By    |   Friday, 30 Oct 2009 01:10 PM

Former Reagan White House economic adviser Martin Feldstein has gone rogue, saying that the weak dollar is great for the United States and that it will increase exports and generate jobs, something of a heretical statement for a conservative economist.

According to Feldstein, a “competitive” dollar is a good thing.

“America needs a competitive dollar. More specifically, we need a competitive exchange rate relative to the other major currencies of the world — an exchange rate that will make American goods more attractive to foreign buyers and that will cause American consumers and firms to choose American made goods and services,” says Feldstein.

The former chairman of the Council of Economic Advisors notes that the message from U.S. policymakers should be “that we need a competitive dollar abroad and a strong dollar at home.”

Other economic gurus do not agree with Feldstein’s argument.

“I cannot overstate how strongly I disagree with this position. ‘Strong Dollar, Strong Country’ is more than a mantra for me, since economic history indicates that no country has ever achieved greatness, nor maintained it, by debasing its currency,” writes Carl T. Delfeld on the financial blog, Seeking Alpha.

“Have you ever heard of a country in deep economic trouble because of a strong currency? In short, the value of a nation’s currency is a reflection of the perceived value of the country in the global marketplace,” he writes.

Delfield, an investment advisor, notes that a weaker dollar translates into a cut in the real spending power of American consumers, a reduction in real income.

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Former Reagan White House economic adviser Martin Feldstein has gone rogue, saying that the weak dollar is great for the United States and that it will increase exports and generate jobs, something of a heretical statement for a conservative economist.According to...
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2009-10-30
Friday, 30 Oct 2009 01:10 PM
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