By Staff
To the editor:
Since the first of the year the value of the dollar in terms of foreign currency has fallen about 12 percent. You may say you rarely travel out of the country and so this should make little difference to you. But, beware what is now happening right here in the United States because of the weak dollar.
For example, most of us buy gasoline and it comes from Venezuela and the Middle East. Guess what! Gas has gone up in price about 12 percent since the first of 2008 from $2.92 to $3.27 per gallon. Over time, and as foreign consumers bid up the price of cheaper U.S. goods and services, the price of everything here in our country should move up about 12 percent to reflect what has happened to the dollar. The falling value of the dollar will increase exports from the U.S. That will tend to reduce unemployment here which is good. But, unless your income is going up 12 percent every three months – or 48 percent per year – you are going to be in serious financial trouble.
What is happening is that foreign people and their governments are getting more savvy about the dollar as something to have and hold for a rainy day. Now, when our government spends more than it receives in taxes foreigners are unwilling to loan us the difference. Therefore, when our federal government spends more than they tax, the federal government must print dollars to pay its bills and the value of the dollar declines.
Our federal government began its current spending spree five years ago; about the time we invaded Iraq. Since that invasion, the value of our dollar has only fallen about 28 percent. That is because until the last three months when the dollar has fallen 12 percent, foreigners were willing to lend us most of the money necessary to pay our bills. This is no longer the case. Unless we, the citizens of the United States, begin to pay the bills for the Iraq war instead of having foreigners loan us the money, the financial woes here in the United States are going to become quite serious.
We have never before fought a war where we have not sacrificed at home by paying the bills for those fighting for us overseas. The Iraq was is the first time we have relied on others to pay the bills. If we are to continue in the battle in Iraq until we win, we must start paying for that war. Step one down this road is to immediately repeal the Bush tax cuts and step two is to reduce medicare, social security, and other spending until our federal budget is balanced. We must do this now, not six years from now. For those who feel the Bush tax cuts and full social security have been good for the country, we alternatively could increase taxes elsewhere. However, we must increase them very dramatically to balance our federal budget and we must do it fast. Otherwise, we are in for some rough times.
Edwardsburg
Cass County Commissioner, Attorney and
Certified Public Accountant