Although I instinctively support any call to reduce the US military presence abroad, and would also like to see the US bear less of the exorbitant burden that comes from the dominant role of the US dollar, I don’t think this article gets it right in...
newrepublic.com/article/156325…
newrepublic.com/article/156325…
...describing the relationship between the two. For one thing, the 19th Century “dollar diplomacy” to which it refers has nothing in common with the current dominance of the dollar: it merely refers to the fact that Washington was willing to lend or give money to further its...
...foreign policy objectives, something it could do even though the US dollar was a fairly minor global currency at the time, contrary to what the author implies. China, after all, is able to do even more under BRI with a currency of negligible global importance.
What’s more...
What’s more...
..., the claim that it is vitally important for US power that oil-exporters price oil in dollars is nonsense. It makes little difference to the US how oil is priced – mainly saving American importers the minor hassle of buying FX – although it is impossible to convince the...
...conspiratorially minded that this is the case. Oil exporters don’t hold dollars because they will be invaded if they don’t – no matter how often people “in the know” assure you of this – but rather because no other country is able and willing to bear the cost of the...
...so-called “exorbitant privilege”. The US would be better off if it took steps to end it. Hugo Chávez may very well have said in 2007 that “The fall of the dollar is not the fall of the dollar—it’s the fall of the American empire,” but that hardly...
foreignpolicy.com/2011/09/07/an-…
foreignpolicy.com/2011/09/07/an-…
...makes it credible.
The point is that like with its huge military presence, the US pays a cost for the global dominance of the dollar, and while this does give it leverage in international affairs, it is a costly leverage. If you believe US power is based on its coercive...
The point is that like with its huge military presence, the US pays a cost for the global dominance of the dollar, and while this does give it leverage in international affairs, it is a costly leverage. If you believe US power is based on its coercive...
...ability, then clearly US military spending and the dominance of the dollar enhance it. If you believe, however, that its power is based on the strength and flexibility of its economy and the quality of its working force, then I’d argue that they ultimately reduce US power.
