Gates's concern that widening U.S. budget and trade deficits are undermining the dollar was echoed in Davos by policymakers including European Central Bank President Jean-Claude Trichet and German Chancellor Gerhard Schroeder.Gee, what are they so nervous about? Don't they know that we're the primary purveyors of wealth and freedom in the world?
The dollar fell 21 percent against a basket of six major currencies from the start of 2002 to the end of last year. The trade deficit swelled to a record $609.3 billion last year and total U.S. government debt rose 8.7 percent to $7.62 trillion in the past 12 months.
The U.S. budget shortfall is "the No. 1 risk, disregarding geopolitical risks" to the global economy, German Deputy Finance Minister Caio Koch-Weser said in a Jan. 27 interview in Davos. He urged Bush to present a "credible" plan for getting the deficit under control.I'm sure a credible plan will be immediately forthcoming. As soon as we finish sketching out our strategy for spreading our military involvements into Iran... ($billions more needed? what billions??)