The latest issue of The New Yorker tackles, what else, the slide of the dollar. Color me shocked. Yes, folks, I sense a redundant theme on PiggyBankBlues for years on end. The greenback sucks. But wait! Americans won't notice because A, we don't save; B, we have a ginormous market where corporations beg for market share, even at the cost of decreased profits; C, more people listen to NPR in swahili than Warren Buffet in english; and D, only 28% of Americans have valid passports. Good grief.
James Surowiecki's aptly titled article, Greenback Blues explains why we may not feel the hurt, and why perhaps we should.
- "... consider Halo 3, Microsoft’s new Xbox 360 game. If you buy Halo 3 from Amazon.com, you’ll pay sixty bucks. If you buy it from Amazon.de, in Germany, you’ll pay ninety-three dollars. Adjusted for taxes, this means that German consumers are paying twenty-six per cent more than Americans for the very same product.
- The virtues of this peculiar arrangement are obvious: Americans are able to buy far more stuff with their flimsy currency than one would expect. The vice, if there is one, may be that the relative painlessness of the dollar’s decline has made it easier to ignore the reasons for it, like our colossal government debt and the trillions of dollars we’re going to have to spend on Medicare and Social Security for retiring baby boomers. We know that these things matter, but it’s hard to get worried about them when foreign-made DVD players cost twenty-nine dollars. The danger is that if no changes are made, and the dollar continues to fall, the safety net may at some point get yanked away..."
3 comments:
I worry about the long-term damage too. Can a country go bankrupt? It seems like our credit will have to run out at some point. I hope it's not at the same time that we need to bolster Social Security and Medicare, but it's certainly looking like everything could coincide at once.
I think it's interesting that a weak dollar could affect so few Americans. It's amazing really.
Thanks for posting this! I love the New Yorker. They always connect the dots for me ;)
Do I get credit for my passport only just having expired? And for being too scared of the DMV to change my name (married) on my license and thus not want to update the passport until my new name is on my other ID?
Otherwise I'd be quite embarrassed.
Ms. M&P makes a good point that it seems (sometimes) as though our country will simply go bankrupt. Money, safety, and security aren't everything, but it would be nice...
mrs micah- i know, it's so difficult to get a passport! i'm always very careful not to let mine expire because i am a naturalized citizen and can't even imagine the headache...
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